Federal Register / Vol. 88, No. 233 / Wednesday, December 6, 2023 / Rules and Regulations 84713 

shall not be deemed to ‘‘control’’ such 

generators. 

* * * * * 

■ 34. Section 262.232 is amended by 

revising the paragraphs (a)(5), (b)(4) 

introductory text, and (b)(4)(ii)(C) to 

read as follows: 

§ 262.232 Conditions for a generator 

managing hazardous waste from an 

episodic event. 

(a) * * * 

(5) The very small quantity generator 

must comply with the hazardous waste 

manifest provisions of subpart B of this 

part and the recordkeeping provisions 

for small quantity generators in § 262.44 

when it sends its episodic event 

hazardous waste off site to a designated 

facility, as defined in § 260.10 of this 

subchapter. 

* * * * * 

(b) * * * 

(4) Accumulation by small quantity 

generators. A small quantity generator is 

prohibited from accumulating 

hazardous wastes generated from an 

episodic event on drip pads and in 

containment buildings. When 

accumulating hazardous waste 

generated from an episodic event in 

containers and tanks, the following 

conditions apply: 

* * * * * 

(ii) * * * 

(C) Use inventory logs, monitoring 

equipment or other records to identify 

the date upon which each episodic 

event begins; and 

* * * * * 

■ 55. Section 266.508 is amended by 

revising paragraphs (a)(1)(iii)(C) and 

(a)(2)(i) to read as follows: 

§ 266.508 Shipping non-creditable 

hazardous waste pharmaceuticals from a 

healthcare facility of evaluated hazardous 

waste pharmaceuticals from a reverse 

distributor. 

(a) * * * 

(1) * * * 

(iii) * * * 

(C) Lab packs that will be incinerated 

in compliance with § 268.42(c) of this 

subchapter are not required to be 

marked with EPA hazardous waste 

numbers (i.e., hazardous waste codes), 

except D004, D005, D006, D007, D008, 

D010, and D011, where applicable. A 

nationally recognized electronic system, 

such as bar coding or radio frequency 

identification tag, may be used to 

identify the applicable EPA hazardous 

waste numbers (i.e., hazardous waste 

codes). 

* * * * * 

(2) * * * 

(i) A healthcare facility shipping 

noncreditable hazardous waste 

pharmaceuticals is not required to list 

all applicable EPA hazardous waste 

numbers (i.e., hazardous waste codes) in 

Item 13 of EPA Form 8700–22. 

* * * * * 

[FR Doc. 2023–26750 Filed 12–5–23; 8:45 am] 

BILLING CODE 6560–50–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Parts 430 and 435 

Office of the Secretary 

45 CFR Part 16 

[CMS–2447–IFC] 

RIN 0938–AV26 

Medicaid; CMS Enforcement of State 

Compliance With Reporting and 

Federal Medicaid Renewal 

Requirements Under Section 1902(tt) 

of the Social Security Act 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Interim final rule with comment 

period. 

SUMMARY: This interim final rule with 

request for comments (IFC) implements 

reporting requirements and enforcement 

authorities in the Social Security Act 

(the Act) that were added by the 

Consolidated Appropriations Act, 2023 

(CAA, 2023). CMS will use these new 

enforcement authorities as described in 

this rule if States fail to comply with the 

new reporting requirements added by 

the CAA, 2023 or with Federal Medicaid 

eligibility redetermination requirements 

during a timeframe that is generally 

aligned with the period when States are 

restoring eligibility and enrollment 

operations following the end of the 

Medicaid continuous enrollment 

condition under the Families First 

Coronavirus Response Act (FFCRA). 

The new enforcement authorities 

include requiring States to submit a 

corrective action plan, suspending 

disenrollments from Medicaid for 

procedural reasons, and imposing civil 

money penalties (CMPs). They also 

include applying a reduction to the 

State-specific Federal Medical 

Assistance Percentage (FMAP) for 

failure to meet reporting requirements. 

DATES: These regulations are effective 

on December 6, 2023. 

Comment date: To be assured 

consideration, comments must be 

received at one of the addresses 

provided below, by February 2, 2024. 

ADDRESSES: In commenting, please refer 

to file code CMS–2447–IFC. 

Comments, including mass comment 

submissions, must be submitted in one 

of the following three ways (please 

choose only one of the ways listed): 

1. Electronically. You may submit 

electronic comments on this regulation 

to http://www.regulations.gov. Follow 

the ‘‘Submit a comment’’ instructions. 

2. By regular mail. You may mail 

written comments to the following 

address ONLY: Centers for Medicare & 

Medicaid Services, Department of 

Health and Human Services, Attention: 

CMS–2447–IFC, P.O. Box 8016, 

Baltimore, MD 21244–8016. 

Please allow sufficient time for mailed 

comments to be received before the 

close of the comment period. 

3. By express or overnight mail. You 

may send written comments to the 

following address ONLY: Centers for 

Medicare & Medicaid Services, 

Department of Health and Human 

Services, Attention: CMS–2447–IFC, 

Mail Stop C4–26–05, 7500 Security 

Boulevard, Baltimore, MD 21244–1850. 

For information on viewing public 

comments, see the beginning of the 

SUPPLEMENTARY INFORMATION section. 

FOR FURTHER INFORMATION CONTACT: 

Abby Kahn, (410) 786–4321, 

Abigail.Kahn@cms.hhs.gov, or Anna 

Bonelli, (443) 615–1268, Anna.Bonelli@

cms.hhs.gov. 

SUPPLEMENTARY INFORMATION: 

Inspection of Public Comments: All 

comments received before the close of 

the comment period are available for 

viewing by the public, including any 

personally identifiable or confidential 

business information that is included in 

a comment. We post all comments 

received before the close of the 

comment period on the following 

website as soon as possible after they 

have been received: http://

www.regulations.gov. Follow the search 

instructions on that website to view 

public comments. CMS will not post on 

Regulations.gov public comments that 

make threats to individuals or 

institutions or suggest that the 

commenter will take actions to harm an 

individual. CMS continues to encourage 

individuals not to submit duplicative 

comments. We will post acceptable 

comments from multiple unique 

commenters even if the content is 

identical or nearly identical to other 

comments. 


lotter on DSK11XQN23PROD with RULES1
84714 Federal Register / Vol. 88, No. 233 / Wednesday, December 6, 2023 / Rules and Regulations 

1Medicaid regulations use both terms 

‘‘redetermination’’ and ‘‘renewal.’’ For purposes of 

this rule, we interpret the reference to all Federal 

requirements applicable to eligibility 

redeterminations in section 1902(tt)(2)(B)(i) of the 

Act to include Federal renewal requirements 

outlined in 42 CFR 435.916, as newly defined at 

§ 430.5 in this rule. 

2Section 5131(a) of Subtitle D of Title V of 

Division FF of the CAA, 2023 also amended section 

6008 of the FFCRA to revise the conditions States 

must meet to claim the temporary FMAP increase 

for each quarter beginning April 1, 2023, to extend 

the availability of the temporary FMAP increase 

until December 31, 2023, and to gradually phase 

down the amount of the increase for each quarter 

from April 1, 2023, to December 31, 2023. 

3https://www.medicaid.gov/Federal-policyguidance/downloads/sho22001.pdf. 

4https://www.medicaid.gov/federal-policyguidance/downloads/sho23002.pdf. 

I. Background 

A. Enforcement Authorities Under 

Section 1902(tt) of the Social Security 

Act 

Section 1902(tt)(2) of the Social 

Security Act (the Act) (added by section 

5131(b) of Subtitle D of Title V of 

Division FF of the Consolidated 

Appropriations Act, 2023 (CAA, 2023), 

Public Law 117–328, enacted December 

29, 2022) includes new enforcement 

authority for CMS to use if it determines 

that a State is not in compliance with 

the reporting requirements under 

section 1902(tt)(1) of the Act, Federal 

eligibility redetermination 

requirements,1 or both. 

First, if CMS determines that a State 

is not in compliance with the reporting 

requirements under section 1902(tt)(1) 

of the Act for any fiscal quarter that 

occurs during the period that begins on 

July 1, 2023, and ends on June 30, 2024, 

section 1902(tt)(2)(A) of the Act requires 

CMS to reduce the Federal Medical 

Assistance Percentage (FMAP) as 

determined for the State for the quarter 

under section 1905(b) of the Act by the 

number of percentage points (not to 

exceed 1 percentage point) equal to the 

product of 0.25 percentage points and 

the number of fiscal quarters during 

such period for which the State has 

failed to satisfy such requirements. Per 

section 1902(tt)(2)(A) of the Act, the 

FMAP reduction is for fiscal quarters 

occurring in the period beginning on 

July 1, 2023, and ending on June 30, 

2024. Therefore, CMS will not apply the 

FMAP reduction under section 

1902(tt)(2)(A) of the Act to the quarter 

from April 1, 2023, to June 30, 2023, 

and CMS will not evaluate Statereported data reflecting activities during 

these months for purposes of the FMAP 

reduction. 

Second, if CMS determines that a 

State is not in compliance with Federal 

eligibility redetermination 

requirements, the reporting 

requirements under section 1902(tt)(1) 

of the Act, or both, section 1902(tt)(2)(B) 

of the Act authorizes CMS to require a 

State to submit a corrective action plan 

(CAP) to address the noncompliance. If 

the State fails to submit or implement 

an approved CAP in accordance with 

section 1902(tt)(2)(B)(ii) of the Act, then, 

under section 1902(tt)(2)(B)(iii) of the 

Act, CMS may require the State to 

suspend some or all terminations of 

Medicaid eligibility that are for 

procedural reasons (hereinafter referred 

to as ‘‘procedural disenrollments’’) and 

may also impose civil money penalties 

(CMPs) of up to $100,000 for each day 

a State is not in compliance. In this rule, 

CMS defines procedural disenrollments 

in § 430.5 to mean, for the purposes of 

§ 430.49 and 45 CFR part 16, a 

termination of a beneficiary’s Medicaid 

eligibility after providing advance 

notice required under 42 CFR part 431, 

subpart E for reasons that are unrelated 

to a State’s determination of whether the 

individual meets eligibility criteria to 

qualify for coverage, including for 

failure to return a renewal form or 

documentation needed by the State to 

make a determination of eligibility. This 

new authority under section 

1902(tt)(2)(B) of the Act is in addition to 

any FMAP reduction that may also be 

applicable under section 1902(tt)(2)(A) 

of the Act or any other enforcement 

authority available to the Secretary. This 

new enforcement authority under 

section 1902(tt)(2)(B) of the Act relates 

to State conduct occurring during the 

period that began on April 1, 2023, and 

ends on June 30, 2024. 

Both the new enforcement authorities 

in section 1902(tt)(2)(A) of the Act and 

in section 1902(tt)(2)(B) of the Act took 

effect on April 1, 2023. As noted above, 

the enforcement authority in section 

1902(tt)(2)(A) of the Act does not apply 

to State conduct during the period from 

April 1, 2023, to June 30, 2023. 

B. New Enforcement Needs and 

Considerations Given the Ending of the 

Medicaid Continuous Enrollment 

Condition 

Section 1902(tt) of the Act applies 

during a period when States are 

conducting an unprecedented volume of 

Medicaid eligibility redeterminations. 

Under section 6008(b)(3) of the FFCRA 

(Pub. L. 116–127, originally enacted 

March 18, 2020), States were able to 

claim a temporary 6.2 percentage point 

increase in their FMAP provided that 

they met several conditions, including 

that they not disenroll most persons 

enrolled in Medicaid as of or after 

March 18, 2020, until the last day of the 

month in which the COVID–19 Public 

Health Emergency (PHE) ended. This 

provision is known as the Medicaid 

continuous enrollment condition. As of 

April 1, 2023, 50 States, the District of 

Columbia, and the five U.S. Territories 

(referred to as ‘‘States’’ throughout, 

consistent with section 1101(a) of the 

Act), were claiming the FFCRA FMAP 

increase, so this condition applied to all 

States. 

Section 5131(a) of Subtitle D of Title 

V of Division FF of the CAA, 2023 made 

several changes to section 6008 of the 

FFCRA. As relevant here, section 

5131(a)(2)(C) of Subtitle D of Title V of 

Division FF of the CAA, 2023 separated 

the end of the continuous enrollment 

condition from the end of the COVID– 

19 PHE by amending section 6008(b)(3) 

of the FFCRA to end continuous 

Medicaid enrollment as a condition for 

claiming the FFCRA temporary FMAP 

increase on March 31, 2023.2 This 

means that, beginning April 1, 2023, all 

56 States claiming the temporary FMAP 

increase were no longer required to 

comply with the continuous enrollment 

condition. Accordingly, States must 

conduct a full renewal of eligibility for 

each beneficiary (as part of a process 

referred to as ‘‘unwinding’’), in 

accordance with 42 CFR 435.916 and as 

described in State Health Official (SHO) 

letter #22–001, ‘‘RE: Promoting 

Continuity of Coverage and Distributing 

Eligibility and Enrollment Workload in 

Medicaid, the Children’s Health 

Insurance Program (CHIP), and Basic 

Health Program (BHP) Upon Conclusion 

of the COVID–19 Public Health 

Emergency’’ (March 2022 SHO letter).3

CMS previously released guidance 

describing specific requirements and 

recommendations for States related to 

unwinding from the continuous 

enrollment condition. As a result of the 

policies described in these guidance 

documents, State unwinding periods 

vary and do not necessarily overlap 

with the compliance period for the new 

enforcement tools created under section 

1902(tt) of the Act. As discussed in SHO 

letter # 23–002, ‘‘RE: Medicaid 

Continuous Enrollment Condition 

Changes, Conditions for Receiving the 

FFCRA Temporary FMAP Increase, 

Reporting Requirements, and 

Enforcement Provisions in the 

Consolidated Appropriations Act, 2023’’ 

(January 2023 SHO letter),4 beginning as 

early as February 1, 2023, States have 

up to 12 months to initiate, and 14 

months to complete, a renewal for all 

individuals enrolled in Medicaid, a 

period commonly referred to as a State’s 


lotter on DSK11XQN23PROD with RULES1
Federal Register / Vol. 88, No. 233 / Wednesday, December 6, 2023 / Rules and Regulations 84715 

5While the requirements of section 6008 of the 

FFCRA do not apply to separate CHIPs or the Basic 

Health Program (BHP), CMS recognizes some States 

elected to apply certain provisions of section 6008 

to their separate CHIP program or BHP. In those 

circumstances, subject to exceptions noted and 

other Federal requirements, much of CMS’ guidance 

related to unwinding from the FFCRA continuous 

enrollment condition also applies to CHIP and BHP. 

However, neither section 1902(tt) of the Act, nor 

this rule, applies to separate CHIPs or BHPs. 

6For additional guidance about State renewals of 

eligibility following the end of the continuous 

enrollment condition see www.medicaid.gov/ 

unwinding. 

7See the January 2023 SHO Letter. See also CMS, 

‘‘Consolidated Appropriations Act, 2023: FMAP 

Reduction for Failure to Meet Reporting 

Requirements under Section 1902(tt)(1) of the 

Social Security Act, Frequently Asked Questions for 

State Medicaid and CHIP Agencies,’’ (June 30, 2023) 

(‘‘June 2023 FAQs’’) (Available at: https://

www.medicaid.gov/federal-policy-guidance/ 

downloads/fmap-rdctn-repot-medcid-chip-agncs06302023.pdf). 

‘‘unwinding period.’’ 5 Starting on or 

after April 1, 2023, States claiming the 

temporary FFCRA FMAP increase may 

disenroll persons determined to be 

ineligible by a renewal initiated during 

the State’s unwinding period. Likewise, 

the March 2022 SHO letter outlines 

CMS’ expectations for renewals during 

unwinding. As also discussed in the 

January 2023 SHO letter, States had the 

option to initiate the first cohort of 

renewals to begin their unwinding 

period in February, March, or April 

2023.6

Section 1902(tt) of the Act took effect 

on April 1, 2023, the day after the 

continuous enrollment condition 

expired. It imposes new reporting 

requirements on States during a period 

that generally overlaps with States’ 

unwinding periods. It also provides 

CMS with new authority to take 

enforcement action if States fail to 

comply with Federal requirements 

related to eligibility redetermination or 

the new reporting requirements. 

Notably, these new reporting 

requirements and CMS’ authority to 

enforce redetermination and data 

reporting requirements apply to all 56 

States, regardless of whether a State is 

continuing to claim the FFCRA FMAP 

increase. This rule implements the new 

reporting requirements in section 

1902(tt)(1) of the Act and the 

enforcement authorities in section 

1902(tt)(2) of the Act (which are further 

discussed in the section II). 

C. Monitoring Eligibility 

Redetermination Activities 

Section 1902(tt) of the Act authorizes 

CMS to closely monitor and enforce 

Federal redetermination requirements 

during a period that generally aligns 

with States’ unwinding periods, and 

thus, these authorities better position 

CMS to take actions to prevent 

unauthorized disenrollments during this 

critical period. Section 1902(tt)(1) of the 

Act requires that, for each month 

occurring during the period beginning 

on April 1, 2023, and ending on June 30, 

2024, States must submit on a timely 

basis to CMS, and CMS must make 

public, certain monthly data about 

activities related to eligibility 

redeterminations conducted during that 

same period. The January 2023 SHO 

letter discussed these reporting 

requirements under section 1902(tt)(1) 

of the Act in further detail and 

explained that all the data States must 

report under these new reporting 

requirements are included in existing 

data sources, including the Unwinding 

Data Report and State-based Exchanges 

(SBE) priority metrics.7

Based on the timeframe when the 

reporting requirements under section 

1902(tt)(1) of the Act apply, and the title 

of section 1902(tt)(1) of the Act, which 

refers to the ‘‘transition from [the 

FFCRA] FMAP increase,’’ CMS 

interprets the statutory data collection 

and reporting requirements to be a 

means to help CMS monitor States’ 

work unwinding from the Medicaid 

continuous enrollment condition and 

returning to regular eligibility and 

enrollment operations. Under our 

interpretation, the reporting 

requirements under section 1902(tt)(1) 

of the Act will help us monitor whether 

States are compliant—during a 

timeframe that generally aligns with 

their return to regular eligibility and 

enrollment operations—with Federal 

eligibility redetermination requirements 

(including renewal requirements at 42 

CFR 435.916, strategies authorized 

under section 1902(e)(14) of the Act, or 

alternative strategies authorized by 

CMS, including alternative or mitigation 

strategies CMS has authorized States to 

implement under section 6008(f)(2)(A) 

of the FFCRA, which was added by 

section 5131 of Subtitle D of Title V of 

Division FF of the CAA, 2023). 

Additionally, because section 1902(tt) of 

the Act also includes the new 

enforcement authorities in section 

1902(tt)(2)(B) of the Act, CMS interprets 

the data collection and reporting 

requirements under section 1902(tt)(1) 

to be a tool CMS can use to monitor 

State compliance with Federal 

eligibility redetermination requirements 

during a period that generally aligns 

with States’ unwinding periods. 

CMS has also been monitoring States’ 

implementation of other amendments 

made by section 5131 of Subtitle D of 

Title V of Division FF of the CAA, 2023, 

which create new conditions for States 

seeking to receive the FFCRA temporary 

FMAP increase through December 31, 

2023. These new conditions for 

receiving the FFCRA temporary FMAP 

increase also give CMS ways to 

incentivize States to minimize the 

disruption in coverage resulting from 

procedural disenrollments during 

States’ unwinding periods. Specifically, 

the CAA, 2023 added to the FFCRA new 

section 6008(f)(2)(A), which conditions 

receipt of the FFCRA FMAP increase 

after April 1, 2023, on State compliance 

with Federal redetermination 

requirements, including renewal 

strategies authorized under section 

1902(e)(14)(A) or other alternative 

processes and procedures approved by 

the Secretary. New FFCRA section 

6008(f)(2)(B) conditions receipt of the 

FFCRA FMAP increase after April 1, 

2023, on States’ maintaining up-to-date 

contact information for a beneficiary 

before redetermining eligibility for such 

beneficiary, and new section 

6008(f)(2)(C) conditions receipt of the 

FFCRA FMAP increase after April 1, 

2023, on States’ undertaking a good 

faith effort to contact an individual 

using more than one modality prior to 

terminating their enrollment on the 

basis of returned mail. The January 2023 

SHO letter outlines these new 

conditions for receiving the FFCRA 

FMAP increase in greater detail. 

Because the same section of the CAA, 

2023 that added new section 1902(tt) to 

the Act also included both these 

conditions for receiving the FFCRA 

FMAP increase, CMS interprets the 

entirety of the changes made in section 

5131 of subtitle D of division FF of the 

CAA, 2023 to give CMS a range of 

enforcement mechanisms and 

incentives that, taken together, can be 

used to help minimize the 

disenrollment of people who otherwise 

continue to meet the substantive 

eligibility criteria and whose enrollment 

would be retained but for their failure 

to meet a procedural requirement during 

States’ unwinding periods. One key 

purpose of section 1902(tt) is thus to 

enhance CMS’ ability to take 

enforcement action against 

noncompliant States during this critical 

timeframe. 

CMS takes seriously its responsibility 

to hold States accountable for resuming 

routine eligibility and enrollment 

operations and plans to fully exercise 

the new authorities at section 1902(tt) of 

the Act when appropriate to do so. 

Since the FFCRA was enacted, CMS has 

been preparing for the eventual 

unwinding of the FFCRA continuous 

enrollment condition. CMS has 

explained to States the conditions of the 

FFCRA FMAP increase, gauged States’ 


lotter on DSK11XQN23PROD with RULES1
84716 Federal Register / Vol. 88, No. 233 / Wednesday, December 6, 2023 / Rules and Regulations 

ability to resume redeterminations on an 

unprecedented scale, and provided 

States with technical assistance to 

address challenges that might lead to 

preventable loss of coverage for 

procedural reasons among beneficiaries. 

If CMS identifies a violation of Federal 

redetermination requirements, then, 

consistent with section 6008(f)(2)(A) of 

the FFCRA, CMS will communicate to 

the State that its FFCRA FMAP increase 

will be withheld if the State does not 

ensure the issue is fully resolved or does 

not implement appropriate mitigations 

until full compliance can be achieved. 

The new enforcement tools outlined 

at section 1902(tt) of the Act, which 

allow CMS to enforce existing Federal 

redetermination requirements as well as 

the reporting requirements at section 

1902(tt)(1) of the Act, are a key part of 

the suite of CMS enforcement 

mechanisms and incentives added 

through the CAA, 2023 to minimize the 

disenrollment of eligible individuals 

during States’ unwinding periods. These 

new enforcement tools are critical to 

enabling CMS to effectively monitor for, 

and take action to protect against, States 

conducting renewals that do not adhere 

to Federal redetermination requirements 

and to support continued enrollment for 

those individuals who remain eligible. 

Nothing in this rule affects other 

authorities that exist outside of this new 

enforcement framework or precludes 

CMS from pursuing additional 

enforcement action under section 1904 

of the Act, including withholding 

Federal financial participation (FFP), or 

limiting payments, for States that fail to 

comply with requirements of the 

Medicaid statute. 

D. Pre-Compliance Engagement With 

States 

When CMS becomes aware of a 

potential violation of Federal 

requirements, we first attempt to work 

collaboratively with the State to 

understand the nature and scope of the 

problem and to identify appropriate 

alternative processes and procedures 

that the State can adopt to avoid or 

minimize beneficiary harm until the 

State can fix the problem and come into 

full compliance with Federal 

requirements, consistent with our 

authority to enforce compliance with 

section 1902 under section 1904 of the 

Act and 42 CFR 430.35. Consistent with 

this practice, as discussed in section 

II.A of this rule, CMS will provide 

technical assistance to States facing 

unusual circumstances that interfere 

with their ability to comply fully with 

section 1902(tt)(1) of the Act reporting 

requirements and will consider 

approving alternative timelines and 

processes for meeting those 

requirements. The statute does not give 

CMS the discretion to avoid taking an 

FMAP reduction under section 

1902(tt)(2)(A) of the Act for a quarter in 

the period beginning July 1, 2023, and 

ending June 30, 2024, if a State 

ultimately fails to report each of the 

metrics required under section 

1902(tt)(1) of the Act for that quarter. 

However, CMS will consider mitigating 

circumstances before taking additional 

enforcement action under section 

1902(tt)(2)(B) of the Act if a State fails 

to meet the reporting requirements 

under section 1902(tt)(1) of the Act 

during the period from April 1, 2023, to 

June 30, 2024. 

If CMS’ efforts to work collaboratively 

with States are successful, and the State 

takes necessary steps to address 

beneficiary harm and prevent future 

harm (such as reinstating eligibility for 

affected beneficiaries and suspending 

procedural disenrollments, where 

appropriate), CMS might not initiate 

compliance action under section 

1902(tt)(2)(B) of the Act. However, if 

CMS determines that a State violated 

the section 1902(tt)(1) of the Act 

reporting requirements or Federal 

redetermination requirements, CMS will 

consider exercising the enforcement 

authorities in section 1902(tt)(2)(B) of 

the Act, as implemented in this rule. 

II. Provisions of the Interim Final Rule 

With Comment 

This rule adds new 42 CFR 430.49 

and 435.927 and 435.928 to the CFR and 

amends §§ 430.3, 430.5, and 45 CFR part 

16. New § 430.49 of this rule interprets 

and implements section 1902(tt)(2)(B) of 

the Act, which authorizes CMS to do the 

following: (1) require States to submit 

and implement a CAP for 

noncompliance with Federal 

requirements applicable to eligibility 

redeterminations and the reporting 

requirements described in section 

1902(tt)(1) of the Act; and (2) if the State 

fails to submit or implement an 

approvable CAP in accordance with 

section 1902(tt)(2)(B)(ii), require the 

State to suspend some or all 

disenrollments from Medicaid for 

procedural reasons until the State takes 

appropriate corrective action, impose 

CMPs of not more than $100,000 for 

each day the State is not in compliance, 

or both. New § 435.927 interprets and 

implements section 1902(tt)(1) of the 

Act, which requires that, for each month 

occurring during the period beginning 

on April 1, 2023, and ending on June 30, 

2024, States must submit on a timely 

basis to CMS, and CMS must make 

public, certain monthly data about 

activities related to eligibility 

redeterminations conducted during that 

same period. 

New § 435.928 specifies how CMS 

will implement the FMAP reduction 

required under section 1902(tt)(2)(A) of 

the Act. If a State does not satisfy the 

reporting requirements described in 

section 1902(tt)(1) of the Act for any 

fiscal quarter in the period that begins 

on July 1, 2023 and ends on June 30, 

2024, section 1902(tt)(2)(A) of the Act 

requires CMS to reduce the FMAP 

determined for the State for the quarter 

under section 1905(b) of the Act by the 

number of percentage points (not to 

exceed 1 percentage point) equal to the 

product of 0.25 percentage points and 

the number of fiscal quarters during 

such period for which the State has 

failed to satisfy such requirements. 

The provisions of this rule apply to 

the States, District of Columbia, and all 

5 territories—Guam, Puerto Rico, the 

Virgin Islands, the Northern Mariana 

Islands, and American Samoa. While 

the regulations in part 435 apply only to 

the States, the District of Columbia, the 

Northern Mariana Islands and American 

Samoa, § 436.901 provides that with one 

exception (not relevant here), the 

requirements of part 435, subchapter J, 

which includes §§ 435.927 and 435.928 

through this rulemaking, apply to 

Guam, Puerto Rico, and the Virgin 

Islands. 

The new enforcement authority 

granted to CMS under section 

1902(tt)(2)(A) and (B) of the Act will 

improve State accountability for 

complying with Federal renewal 

requirements while also minimizing 

disruptions to coverage for eligible 

people during a period that generally 

aligns with States’ unwinding activities. 

The additional enforcement activities 

authorized in section 1902(tt)(2) of the 

Act will reinforce and augment the 

routine monitoring and compliance 

action that CMS is already undertaking 

to promote State compliance with 

Federal enrollment and eligibility 

requirements, described in section I.C 

and D of this rule. These authorities will 

also help ensure that States remain 

accountable to CMS by requiring them 

to submit certain data to CMS and will 

increase public transparency about 

eligibility redeterminations between 

April 1, 2023, and June 30, 2024, by 

requiring CMS to publicly report the 

data. 

Finally, the rule amends § 430.5 to 

add new definitions of the terms Federal 

redetermination requirements and 

procedural disenrollment for purposes 

of § 430.49, and (with respect to the 

definition of procedural disenrollment 

only) for purposes of 45 CFR part 16. 

And this rule creates reconsideration 


lotter on DSK11XQN23PROD with RULES1
Federal Register / Vol. 88, No. 233 / Wednesday, December 6, 2023 / Rules and Regulations 84717 

8See the January 2023 SHO, and the June 2023 

FAQs. 9See the June 2023 FAQs. 

10The Basic Health Program (BHP) is a program 

for specified individuals who do not qualify for 

Medicaid but whose household income does not 

exceed 200 percent of the Federal poverty level 

(FPL). 

11See the January 2023 SHO Letter, and the June 

2023 FAQs. 

and appeal rights for States under new 

§ 430.49(f) and corresponding 

amendments to § 430.3 and 45 CFR part 

16, to ensure States have clear avenues 

for appealing CMS decisions to require 

suspension of procedural 

disenrollments and/or impose CMPs 

under the new authorities in section 

1902(tt)(2)(B)(iii) of the Act. 

We have also included severability 

clauses at new §§ 430.49(g), 435.927(e), 

and 435.928(c) to emphasize our intent 

that, to the extent a reviewing court 

holds that any provision of these rules 

is unlawful, the remaining provisions 

should take effect and be given the 

maximum effect permitted by law. The 

severability clauses provide that any 

provision of these sections that is held 

to be invalid or unenforceable by its 

terms, or as applied to any person or 

circumstance, or stayed pending further 

agency action, shall be severable from 

the relevant section and shall not affect 

the remainder thereof or the application 

of the provision to persons not similarly 

situated or to dissimilar circumstances. 

A. Reporting Requirements (§ 435.927) 

Section 1902(tt)(1) of the Act requires 

that, for each month occurring during 

the period that begins on April 1, 2023, 

and ends on June 30, 2024, each State 

submits to CMS, and that CMS make 

public, a report on the activities of the 

State relating to eligibility 

redeterminations conducted during 

such period. 

New § 435.927 implements and 

interprets the reporting requirements in 

section 1902(tt)(1) of the Act. The 

required reporting will help CMS and 

others to monitor State actions during 

the unwinding period and beyond 

because it includes reporting on metrics 

such as the number of individuals 

disenrolled from Medicaid or CHIP and 

certain information about transitions 

from Medicaid or CHIP coverage to 

coverage through an Exchange. 

Reviewing and publishing these 

monthly data will give CMS and the 

public information to help hold States 

accountable for following 

redetermination requirements and will 

promote transparency. 

CMS interprets section 1902(tt)(1) of 

the Act to require that States report data 

representing the activities conducted 

during each month of the designated 

time period.8 However, CMS does not 

believe the provision requires that 

States must submit all the required 

monthly reports by June 30, 2024, 

because it will take States time to 

assemble, review, and submit data from 

the months for which they are reporting. 

For example, States must report on 

activities occurring in June 2024, but the 

submission of that monthly report could 

occur after June 30, 2024, to allow the 

State time to collect, review, and submit 

the data.9 This is reflected in new 

§ 435.927(c), which requires States to 

report certain data representing 

activities conducted by a State during 

the time period beginning April 1, 2023, 

and ending June 30, 2024. 

To help ensure that CMS and the 

public can use and understand the data, 

avoid redundancy, and for purposes of 

practicality, CMS is interpreting the 

data elements required under section 

1902(tt)(1) of the Act differently in 

§ 435.927(d) depending on the element. 

Section 1902(tt)(1) of the Act directs the 

Secretary to make public reports with 

data ‘‘relating to eligibility 

redeterminations,’’ but CMS is not 

interpreting all the reporting elements 

listed in the subsequent subparagraphs 

to be limited to data related to such 

redeterminations. Specifically, CMS is 

interpreting the reporting elements 

listed in section 1902(tt)(1)(A), (B) and 

(D) of the Act to represent only those 

individuals who are subject to Medicaid 

or CHIP redeterminations but is not 

interpreting the elements listed in 

section 1902(tt)(1)(C) or (E) of the Act to 

be limited to reporting on such 

individuals. 

Paragraphs (A) and (B) of section 

1902(tt)(1) of the Act require States to 

report on certain data elements for 

persons with coverage for medical 

assistance, child health assistance, or 

pregnancy-related assistance, which 

CMS interprets to refer to people with 

Medicaid or CHIP coverage, including 

pregnancy-related coverage in both 

programs. The data elements required 

under paragraphs (A) and (B) are as 

follows: the number of eligibility 

renewals initiated, beneficiaries 

renewed on a total and ex parte basis 

(that is, based on available reliable 

information without contacting the 

individual consistent with 

§ 435.916(a)(2)), individuals who were 

disenrolled for any reason, and the 

number of individuals disenrolled for 

procedural reasons. These data points 

are all the direct result of Medicaid or 

CHIP eligibility redetermination actions 

and thus new § 435.927(d)(1) through 

(5) require States to report this 

information only for people undergoing 

Medicaid or CHIP redeterminations. 

Similarly, paragraph (D) of section 

1902(tt)(1) of the Act requires States to 

report the number of individuals whom 

a Federal or State-based Exchange 

determined eligible for a qualified 

health plan or a Basic Health Program 

(BHP),10 as well as the number of 

individuals who selected a qualified 

health plan or enrolled in a BHP 

(section 1902(tt)(1)(D)(i) and (ii) of the 

Act specifically require data related to 

BHPs). Paragraph (D) of section 

1902(tt)(1) of the Act does not specify 

that these data be limited only to 

numbers of individuals whose eligibility 

had been redetermined by the Medicaid 

program. However, these data elements 

are only useful to CMS in understanding 

‘‘the activities of the State relating to 

eligibility redeterminations,’’ as directed 

by section 1902(tt)(1) of the Act if the 

data are limited to Medicaid and CHIP 

beneficiaries who have undergone an 

eligibility redetermination. These data 

will help demonstrate if beneficiaries 

found ineligible for Medicaid and CHIP 

during the redetermination process are 

able to find other coverage on 

Exchanges or BHPs and will also help 

CMS and other interested parties 

identify States in which transitions to 

Exchange coverage are relatively 

successful and States in which such 

transitions may not be as successful. 

These data will be most useful for 

oversight of States’ redetermination 

processes if they are limited to the 

numbers of individuals’ accounts that 

were transferred to an Exchange or BHP 

because of a redetermination under 

Medicaid or CHIP. To include other 

transfers (those of consumers who were 

not enrolled in Medicaid or CHIP at the 

time and who newly apply directly with 

their State agency and are determined 

ineligible) would not help to illuminate 

‘‘eligibility redeterminations,’’ because 

new applicants are not in a position to 

lose Medicaid or CHIP coverage. 

Therefore, in new § 435.927(d)(10) and 

(11), we require the reported data 

described in section 1902(tt)(1)(D) of the 

Act to reflect Medicaid/CHIP 

redeterminations. 

In previous guidance,11 we listed the 

reporting elements under section 

1902(tt)(1) of the Act related to 

Exchanges and the anticipated data 

sources for obtaining the data for these 

elements. Specifically, in the January 

2023 SHO letter, in the first column of 

‘‘Table 2: Reporting Elements Under 

Section 1902(tt)(1) for the Period from 

April 1, 2023, through June 30, 2024, 

and Corresponding Data Sources,’’ we 

stated that for States with Exchanges 


lotter on DSK11XQN23PROD with RULES1
84718 Federal Register / Vol. 88, No. 233 / Wednesday, December 6, 2023 / Rules and Regulations 

12States with SBEs that operate an integrated 

eligibility platform have a shared operating system 

between the SBE and the Medicaid/CHIP agency 

that conducts eligibility determinations related to 

new and renewal applications for certain Medicaid 

and CHIP programs and qualified health plans. In 

contrast, States with SBEs that operate a nonintegrated eligibility platform have separate 

operating systems for the SBE and the Medicaid/ 

CHIP agency. Accounts are transferred between the 

separate operating systems depending on the initial 

eligibility determination or assessment for the 

programs made by either the SBE or the Medicaid/ 

CHIP agency. 

13The June 2023 FAQs, in Table 1, cites to CMS, 

‘‘State-Based Exchanges (SBE) Priority Metrics: 

Medicaid/Children’s Health Insurance Program 

(CHIP) Continuous Enrollment Condition 

Unwinding; Overview and Template 1.0 User 

Guide,’’ released May 5, 2023, https://

www.medicaid.gov/resources-for-states/downloads/ 

sbe-medicaid-chip-con-unwind-metrics-reprtguide.pdf. ‘‘The priority metrics include indicators 

that are specific to Medicaid/CHIP continuous 

enrollment unwinding activities. For those metrics, 

SBEs should count activities that were initiated 

through the Medicaid/CHIP agency’s renewal 

process, in which a consumer was determined 

ineligible for limited or full benefit Medicaid or 

CHIP.’’ 

that use the Federal Exchange eligibility 

and enrollment platform (including 

Federally-facilitated Exchanges (FFEs) 

and SBEs on the Federal platform (SBE– 

FPs)) we anticipated that CMS would 

report these data on behalf of States and 

that we intended to limit the data to 

information that is the result of a 

Medicaid or CHIP redetermination 

(which would exclude data resulting 

from a new Medicaid or CHIP 

application). In contrast, for SBEs with 

their own platforms that use either a 

non-integrated or integrated eligibility 

system, we inadvertently did not make 

such a distinction.12 Rather, column one 

in Table 2 of the January 2023 SHO 

letter suggests that the reporting 

elements would apply to Exchange 

activity resulting from all Medicaid or 

CHIP applications. However, in the 

‘‘SBE Priority Metrics: Medicaid/ 

Children’s Health Insurance Program 

(CHIP) Continuous Enrollment 

Condition Unwinding Overview and 

Template 1.0 User Guide (version 1.0, 5/ 

19/2023),’’ which is cited in guidance 

that we released on June 30, 2023,13 we 

specified that SBEs will report only 

those required data elements that result 

from Medicaid or CHIP 

redeterminations. As a result, although 

the labeling in the first column of the 

table in the January 2023 SHO letter is 

inconsistent, the definitions of the 

required State data are consistent across 

types of Exchanges, and therefore the 

data collected and reported will be 

consistent across types of Exchanges, 

and in all cases, including for SBEs not 

using the Federal platform, will be 

limited to information related to 

Medicaid or CHIP redeterminations. 

Section 435.927(d)(10) and (11) reflect 

this. 

As noted, in the January 2023 SHO 

letter, CMS identified the reporting 

requirements under section 1902(tt)(1) 

of the Act that relate to Exchanges. 

Consistent with CMS’ stated 

expectations in that SHO letter, CMS 

will report data on behalf of States with 

Exchanges that use the Federal 

eligibility and enrollment platform 

(including FFEs and SBE–FPs) since 

CMS operates the Federal eligibility and 

enrollment platform. Therefore, States 

do not have to report the data, and we 

are not including in this rule any 

provisions implementing the 

requirements under section 1902(tt)(1) 

of the Act that apply to States with 

Exchanges that use the Federal 

eligibility and enrollment platform. 

Section 435.927(d)(10) and (11) describe 

the reporting requirements that apply to 

States with SBEs that do not use the 

Federal platform. 

Section 435.927(d)(10) and (11) also 

reflect certain practical and operational 

differences between SBEs based on 

whether the Exchange eligibility system 

is integrated with the State’s Medicaid 

and/or CHIP eligibility systems. 

Specifically, some SBEs have integrated 

eligibility systems but others do not. As 

Congress recognized in section 

1902(tt)(1)(D)(i) and (ii) of the Act, there 

is no need for an Exchange with an 

integrated eligibility system to report 

account transfers from the Medicaid 

and/or CHIP agency to the Exchange, 

whereas that data point is relevant for 

Exchanges without integrated eligibility 

systems. 

In contrast to how we are interpreting 

section 1902(tt)(1)(A), (B), and (D) of the 

Act, we are not interpreting section 

1902(tt)(1)(E) of the Act to be limited to 

describing only information about a 

Medicaid or CHIP redetermination. 

States are required under section 

1902(tt)(1)(E) of the Act to report data 

on total call center volume, average wait 

times, and average abandonment rate. 

For these reporting elements, it is 

impractical to limit the measures only to 

data related to eligibility 

redeterminations. States do not always 

identify the purpose of individual calls 

to call centers, calls can address 

multiple purposes and beneficiaries, 

and reprogramming call trees and 

retraining staff could take months for 

States to operationalize, if required. As 

the period for which States are required 

to report these data under section 

1902(tt)(1)(E) of the Act has already 

begun and is time-limited, it is 

impractical to limit the collection of the 

call center data required under 

1902(tt)(1)(E) of the Act to only those 

calls related to individuals’ eligibility 

redeterminations. Furthermore, these 

call center metrics are useful because 

they illustrate the extent to which all 

beneficiaries, including those whose 

eligibility is being redetermined, can 

access assistance. Accordingly, new 

§ 435.927(d)(7) through (9) are not 

limited to just call center information 

related to redeterminations. 

CMS is also not interpreting section 

1902(tt)(1)(C) of the Act to be limited to 

describing only information about a 

Medicaid or CHIP redetermination. 

Section 1902(tt)(1)(C) of the Act requires 

States to report on the number of 

individuals enrolled in a separate CHIP 

program under section 2101(a)(1) of the 

Act. Broadening the data collected 

under paragraph (C) to include the total 

number of enrollees in a separate CHIP, 

not just those enrolling subject to a 

Medicaid or CHIP eligibility 

redetermination, provides useful 

information. In addition to being new 

data that is not publicly reported 

elsewhere, the data helps CMS and 

others identify whether separate CHIP 

programs’ total enrollment levels are 

changing during the applicable period, 

which might indicate whether 

individuals are transitioning to CHIP 

from the Medicaid program. New 

§ 435.927(d)(6) therefore refers to 

reporting on total enrollment in separate 

CHIPs. 

Despite not being limited to 

information on redeterminations, data 

elements reported under section 

1902(tt)(1)(C) and (E) of the Act are still 

useful for purposes of providing 

transparency on States’ activities to 

conduct redeterminations. State 

Medicaid agency operational data on 

call center activity—call volume, 

average wait times, and average 

abandonment rates—help illuminate 

beneficiaries’ access to information and 

ability to receive assistance from the 

State, as well as the eligibility process 

generally. Information on the 

enrollment levels for separate CHIP 

programs helps identify trends in 

enrollment that could signal whether a 

State is not performing redeterminations 

or transitioning eligible individuals 

from Medicaid to CHIP. 

All the data States must report under 

the requirements of section 1902(tt)(1) 

of the Act are already being reported 

through existing data reports collected 

by CMS. For efficiency and to improve 

standardization (and hence, 

comparability) of the data, and because 

the applicable statutes, regulations, and 

other guidance governing CMS’ use of 

the data collected through those existing 

data sources permit this, CMS is not 

requiring States to submit separate or 


lotter on DSK11XQN23PROD with RULES1
Federal Register / Vol. 88, No. 233 / Wednesday, December 6, 2023 / Rules and Regulations 84719 

14See sections 1902(a)(4), 1902(a)(6), 1902(a)(75), 

1903(r)(1)(F), and 2107(b)(1) of the Act; see also 42 

CFR 431.16, 42 CFR 433.112(b)(15), 45 CFR 

155.260(a)(1)(ii). See also https://www.federal

register.gov/documents/2019/02/06/2019-01157/ 

privacy-act-of-1974-system-of-records and https://

www.federalregister.gov/documents/2013/10/23/ 

2013-24861/privacy-act-of-1974-report-of-analtered-cms-system-of-records-notice. 

15See the January 2023 SHO Letter, and the June 

2023 FAQs. 

16See the January 2023 SHO Letter, and the June 

2023 FAQs. 

17CMS, ‘‘Medicaid and Children’s Health 

Insurance Program Eligibility and Enrollment Data 

Specifications for Reporting During Unwinding,’’ 

updated December 2022. Available at https://

www.medicaid.gov/sites/default/files/2022-12/ 

unwinding-data-specifications-dec-2022.pdf. 

additional reports to CMS to comply 

with section 1902(tt)(1) of the Act.14

Rather, CMS believes the requirements 

of section 1902(tt)(1) of the Act can be 

met through compliance with the 

following existing, CMS-approved data 

reporting processes: the Unwinding 

Eligibility and Enrollment Data 

Reporting (also referred to as the 

Unwinding Data Report), Medicaid and 

CHIP Eligibility and Enrollment 

Performance Indicator Data (PI data), the 

Transformed Medicaid Statistical 

Information System (T–MSIS), and SBE 

Priority Metrics.15 Additionally, as 

described previously, the required data 

under section 1902(tt)(1) of the Act that 

apply to States with Exchanges that use 

the Federal eligibility and enrollment 

platform will be reported by CMS. 

Under section 1902(tt)(1) of the Act, 

CMS will publish all required data after 

a period of time to allow for data quality 

and validation reviews. 

Section 1902(tt)(1) of the Act requires 

States to submit the required monthly 

data on a timely basis but does not 

include a definition of timely or 

standards for completeness and 

accuracy. CMS already collects the 

required data via existing processes, and 

the timeliness, completeness, and 

quality specifications for data submitted 

via those existing processes have 

generally been defined previously.16

Under this regulation, States will 

generally submit data in accordance 

with these existing timelines and 

specifications unless CMS has approved 

an alternative process or timeline for 

reporting, in which case the State must 

submit the data according to any 

alternative specifications CMS approved 

as part of the alternative process or 

timeline. 

As specified in § 435.927(b)(1), CMS 

will consider data to be timely when it 

is submitted by the deadline outlined in 

the applicable existing reporting process 

specifications, with some variations for 

T–MSIS data and to permit States to 

submit data according to alternative 

processes and timelines approved by 

CMS. CMS will approve these 

alternative processes and timelines 

when, as discussed below, a State is 

making a good faith effort to meet the 

requirements despite facing significant 

challenges that interfere with its ability 

to do so. As an example of how a 

deadline outlined under other existing 

reporting process specifications might 

apply here, the specifications for PI data 

generally require States to submit data 

by the 8th of each month; 17 thus under 

§ 435.927(b)(1), States would report 

these PI data on a timely basis under 

section 1902(tt)(1) of the Act if they 

reported them by the 8th of each month. 

The rule also, however, includes a 

variation on how the existing T–MSIS 

reporting timeline would apply for 

purposes of section 1902(tt)(1) of the 

Act data because, in order for T–MSIS 

data to be useful for section 1902(tt)(1) 

of the Act purposes, these data must be 

reported under a different timeline. 

Specifically, to publicly report data 

under section 1902(tt)(1)(D)(i) of the 

Act, CMS will use T–MSIS data to 

match the records of Medicaid and CHIP 

beneficiaries to data from the FFEs and 

SBEs-FPs and identify the number of 

accounts that are received at these 

Exchanges due to a Medicaid/CHIP 

redetermination. Using these data, CMS 

can determine the other metrics listed 

under section 1902(tt)(1)(D)(i) of the 

Act, such as the total numbers of these 

individuals who apply for and are 

determined eligible for a qualified 

health plan. CMS will also use T–MSIS 

data to publicly report data on the 

number of separate CHIP enrollees for 

each State, as required under section 

1902(tt)(1)(C) of the Act. CMS already 

requires that States maintain current 

data submissions by submitting T–MSIS 

data monthly before the last day of the 

subsequent month, although States are 

not considered to be out of compliance 

for T–MSIS reporting until data 

submissions are behind by 2 or more 

months. As reflected in 

§ 435.927(b)(1)(ii), due to the timesensitive nature of these calculations 

and the need for up-to-date data, States 

that do not submit T–MSIS data 

monthly by the last day of the 

subsequent month may be subject to the 

FMAP reduction under section 

1902(tt)(2)(A) of the Act or other 

corrective action under section 

1902(tt)(2)(B) of the Act. For example, 

T–MSIS data reflecting March 2024 

activities will be due by the end of April 

2024, under § 435.927(b)(1)(ii). 

CMS recognizes that some States 

might encounter unusual circumstances 

that interfere with reporting using 

existing CMS-approved processes or 

that impede a State’s ability to meet the 

deadlines in § 435.927(b)(1)(i) and (ii). 

For example, States may experience 

unforeseeable or unavoidable challenges 

such as a natural disaster or unplanned 

systems outages, or may be working to 

resolve significant foreseeable 

challenges, such as a known and 

reported major operational or systems 

issue that impacts the State’s ability to 

submit timely and accurate data and 

that the State is working to remediate 

but needs additional time to fix. As 

reflected in § 435.927(b)(1)(iii), (b)(3)(ii), 

(b)(4), and (c)(2), CMS would consider 

approving alternative timelines and 

processes for reporting required data if 

a State is making a good faith effort to 

submit the required data. For example, 

CMS would consider allowing such a 

State to submit certain summary data 

via email. As specified in 

§ 435.927(b)(4), a good-faith effort 

means that (1) the State is experiencing 

significant, unforeseeable, or 

unavoidable challenges in complying 

with the reporting requirements of 

§ 435.927(c), or is experiencing 

significant foreseeable challenges in 

complying and is working to remediate 

these challenges but needs additional 

time to address them; (2) the State 

requested and obtained approval from 

CMS to submit the data via an 

alternative process or timeline, and (3) 

the approved alternative process for 

submitting the data or timeline is 

sufficient to ensure CMS can obtain and 

use the data to meet CMS’ obligations to 

report the data publicly per section 

1902(tt)(1) of the Act. CMS will work 

with such a State to ensure that CMS 

has all the data it needs in order to meet 

its requirement to publicly report data 

under section 1902(tt)(1) of the Act and 

will only approve alternative timelines 

or reporting processes that permit CMS 

to meet this requirement. 

States that are ultimately unable to 

submit required data or that submit data 

via an unapproved process or according 

to an unapproved timeline will be 

subject to the enforcement actions in 

section 1902(tt)(2) of the Act. Because 

section 1902(tt)(2)(A) requires CMS to 

take an FMAP reduction if States fail to 

meet the section 1902(tt)(1) of the Act 

reporting requirements for a quarter in 

the period beginning July 1, 2023, and 

ending June 30, 2024, CMS does not 

have the authority to exempt States from 

FMAP reductions for failure to meet the 

section 1902(tt)(1) of the Act reporting 

requirements during that timeframe. 

However, as indicated in § 430.49, CMS 

will consider certain mitigating 

circumstances before taking the various 


lotter on DSK11XQN23PROD with RULES1
84720 Federal Register / Vol. 88, No. 233 / Wednesday, December 6, 2023 / Rules and Regulations 

18For additional discussion about the application 

of the FMAP reduction, see the January 2023 SHO 

Letter, and the June 2023 FAQs. 

19 In the June 2023 FAQs, CMS explained how 

such a decrease would be applied to expenditures 

that are matched at FMAPs articulated elsewhere in 

statute, because they use the 1905(b) State-specific 

FMAP as a base. 

20See, the January 2023 SHO Letter, and the June 

2023 FAQs. 

additional enforcement actions 

described in section 1902(tt)(2)(B) of the 

Act. 

The regulation also provides in 

§ 435.927(b)(2) that in order to be 

considered ‘‘complete’’ for purposes of 

public reporting under section 

1902(tt)(1) of the Act, States must 

submit every data element (although in 

some cases, as noted above, certain 

elements may be submitted on a 

different or later timeframe than others, 

subject to CMS approval). A State that 

ultimately fails to report one or more 

required data elements would be subject 

to the FMAP reduction under section 

1902(tt)(2)(A) of the Act if the State’s 

noncompliance was for a quarter during 

the period from July 1, 2023, through 

June 30, 2024. Such a State might also 

be subject to other enforcement actions 

under section 1902(tt)(2)(B) of the Act; 

these are discussed in section II. of this 

rule. 

Furthermore, in § 435.927(b)(3), the 

regulation provides that to be 

considered of ‘‘sufficient quality,’’ the 

State must report data that adheres to 

specifications outlined in previously 

existing regulation or guidance for each 

of the CMS-approved processes, or data 

that adheres to the specifications 

outlined in an alternative process 

approved by CMS. Existing reporting 

processes are governed by detailed 

instructions that outline how and what 

States should report and help ensure 

that States are reporting consistent data 

that CMS can publicly report, consistent 

with requirements under section 

1902(tt)(1) of the Act. 

New section § 435.927(c) implements 

the reporting requirements in section 

1902(tt)(1) of the Act in light of the 

interpretations that are discussed above 

and reflected in the other paragraphs of 

§ 435.927. Section 435.927(c) specifies 

that States must submit to CMS the data 

described in § 435.927(d), and those 

data must be timely, complete, and of 

sufficient quality (as those terms are 

defined in § 435.927(b)). It further 

provides that States must submit the 

required data via existing CMSapproved processes or through 

alternative processes approved by CMS 

when a State is making a good faith 

effort as defined in § 435.927(b)(4). 

B. Application of the FMAP Reduction 

(§ 435.928) 

If a State does not satisfy the reporting 

requirements in section 1902(tt)(1) of 

the Act for any fiscal quarter that occurs 

during the period that begins on July 1, 

2023, and ends on June 30, 2024, 

section 1902(tt)(2)(A) of the Act requires 

CMS to reduce the FMAP determined 

for the State for the quarter under 

section 1905(b) of the Act by the 

number of percentage points (not to 

exceed 1 percentage point) equal to the 

product of 0.25 percentage points and 

the number of fiscal quarters during 

such period for which the State has 

failed to satisfy such requirements. We 

are implementing this FMAP reduction 

along with our interpretation of how it 

is to be applied in new § 435.928.18 In 

§ 435.928(b)(1), CMS interprets the 

statutory reference to the FMAP 

determined for the State under section 

1905(b) of the Act to mean the Statespecific FMAP defined in the first 

sentence of section 1905(b) of the Act.19

In § 435.928(b)(4), CMS interprets the 

statutory language regarding the amount 

of the reduction to mean that when 

States are noncompliant in multiple 

quarters, the FMAP reduction will 

increase by 0.25 percentage points for 

each successive quarter of 

noncompliance, regardless of whether 

the noncompliant quarters are 

consecutive. For example, if a State 

were out of compliance for three 

quarters, the reduction would be: a 0.25 

percentage point FMAP reduction in the 

first quarter of noncompliance; a 0.50 

percentage point FMAP reduction in the 

second quarter of noncompliance; and a 

0.75 percentage point FMAP reduction 

in the third quarter of noncompliance. 

In no case, however, would the FMAP 

reduction for any single quarter exceed 

1 percentage point. 

We acknowledge that the language of 

the statute would allow for an 

alternative interpretation that would 

require CMS to apply the same 

percentage point reduction to all of the 

quarters in which a State failed to 

comply with the reporting requirements. 

For example, if a State were out of 

compliance for three quarters, CMS 

could apply a 0.75 percentage point 

reduction to the State’s FMAP in all 

three of the applicable quarters. To 

come to that conclusion, CMS would 

have to interpret the statute as requiring 

CMS either to apply the reduction to the 

relevant quarters multiple times, or to 

wait until the end of the period to apply 

the reduction. Neither of these 

alternative approaches supports 

transparency, as the total amount of the 

reduction would not be known until up 

to three quarters after the State is found 

to be noncompliant, making it difficult 

for States to budget for the amount of 

State share they would need for the 

four-quarter period. 

As specified in § 435.928(b)(3), States 

that fail to report data according to the 

requirements in § 435.927 for a single 

month within a quarter will be subject 

to the FMAP reduction for the entire 

quarter. Section 1902(tt)(1) of the Act 

specifies that the FMAP reduction 

should be applied for each fiscal 

quarter. As such, the statute does not 

give CMS the authority to reduce a 

State’s FMAP for a single month.20

C. Corrective Action Plans (§ 430.49(b)) 

As noted in section I.A. of this rule, 

section 1902(tt)(2) of the Act includes 

new enforcement authority for CMS to 

use if it determines that a State is not 

in compliance with the reporting 

requirements in section 1902(tt)(1) of 

the Act, Federal eligibility 

redetermination requirements, or both. 

New § 430.49(b) provides guidelines for 

how CMS will exercise the CAP 

authority created by section 

1902(tt)(2)(B) of the Act. Specifically, 

§ 430.49(b)(1) provides that if CMS 

determines that, during the period 

between April 1, 2023, and June 30, 

2024, a State has been out of compliance 

with the reporting requirements in 

section 1902(tt)(1) of the Act (as 

implemented in § 435.927 of this rule) 

or Federal eligibility redetermination 

requirements (as defined at § 430.5, as 

amended by this rule), then, after 

considering whether mitigating 

circumstances (discussed in section II.E. 

and § 430.49(d) of this rule) apply, CMS 

will determine whether to require the 

State to submit and implement a CAP. 

New § 430.49(b)(2) specifies that CMS 

will issue a written notice to the State 

informing the State of CMS’ finding of 

noncompliance and the requirement to 

submit and implement a CAP, or to 

revise and resubmit an existing 

approved CAP to address newly 

identified violations of the Federal 

reporting and/or redetermination 

requirements, unless consideration of 

certain mitigating circumstances has led 

CMS to delay or forgo requiring a CAP. 

The notice will: (1) explain the violation 

of Federal redetermination or reporting 

requirements that CMS has identified 

and the basis for CMS’ finding; (2) 

inform the State of the requirement to 

submit and implement a new CAP or to 

revise and resubmit an existing CAP, 

with instructions on the method and 

deadline by which the State must 

submit a CAP to CMS; and (3) explain 

the additional enforcement actions that 

CMS may pursue if the State fails to 


lotter on DSK11XQN23PROD with RULES1
Federal Register / Vol. 88, No. 233 / Wednesday, December 6, 2023 / Rules and Regulations 84721 

submit or implement the CAP, 

including if CMS disapproves the 

State’s submitted CAP or if the State 

fails to meet the requirements set forth 

in the approved CAP, in accordance 

with the requirements at section 

1902(tt)(2)(B)(ii) of the Act, as 

interpreted in this rule and discussed in 

section II.D. and at § 430.49(b) of this 

rule. 

As set forth in new § 430.49(b)(3), a 

CAP must include specific content to be 

approved by CMS. First, the CAP must 

identify actions the State will take 

immediately, which means as soon as 

feasible, if needed to prevent further 

harm or risk of harm to beneficiaries 

while it implements the CAP. Harm to 

beneficiaries in this context includes 

increased burden for beneficiaries in 

completing the renewal process, loss of 

coverage at renewal for individuals who 

continue to meet the substantive 

eligibility criteria and whose eligibility 

should otherwise be retained but for 

failure to meet a procedural 

requirement, and delays in access to 

coverage or care. Actions to prevent 

harm, or risk of harm, to beneficiaries 

could include, if needed and 

appropriate, reinstatement of coverage 

for impacted individuals, suspension of 

procedural disenrollments, and 

adoption of alternative processes or 

procedures under section 1902(e)(14)(A) 

of the Act or other alternative strategies 

approved by CMS. 

Next, the CAP must detail steps the 

State will take to ensure compliance 

with Federal redetermination and/or 

reporting requirements, such as new 

policies, procedures, operational 

processes, or systems changes it will 

implement. The CAP must also include 

key milestones and a detailed timeline 

for achieving compliance, as well as a 

plan for communicating the steps in the 

CAP to: (1) State staff, including State 

Medicaid agency staff and staff of any 

agency or other entity that is 

determining eligibility under a 

delegation of authority under 

§ 431.10(c)(1)(i), (2) CMS, and (3) 

beneficiaries, as applicable. CMS 

believes that an approvable CAP must 

include these elements because they 

will allow CMS to assess at the outset 

whether the State’s CAP appears 

sufficient to resolve the noncompliance 

and to monitor whether the State is 

making sufficient progress in its 

implementation. Additionally, these 

elements are consistent with those that 

CMS has historically required when 

requesting CAPs under section 1904 of 

the Act and § 430.35 for failure to 

administer the State Plan in compliance 

with the provisions in section 1902 of 

the Act, violations of which may result 

in withholding of FFP. 

New § 430.49(b)(4) of this rule 

implements section 1902(tt)(2)(B)(ii) of 

the Act by requiring the following 

timeline for submission, approval, and 

implementation of a CAP after the State 

receives notice that CMS is requiring it 

to implement a CAP: 

(1) The State must submit a CAP that 

includes the minimum elements 

described in § 430.49(b)(3) to CMS not 

later than 14 calendar days after 

receiving CMS’ written notice. 

(2) CMS must approve or disapprove 

the proposed CAP within 21 calendar 

days of the date the CAP is submitted 

by the State. If CMS does not approve 

or disapprove the CAP within 21 

calendar days of submission, the CAP 

will be deemed approved. 

(3) The State must begin 

implementation of the CAP not later 

than 14 calendar days after receiving 

CMS approval or after the CAP is 

deemed approved. 

We interpret the statute to refer to 

calendar days and to authorize CMS to 

provide that CAPs not expressly 

approved or disapproved within 21 

calendar days will be deemed approved. 

(Henceforth in this rule, ‘‘days’’ refers to 

calendar days unless otherwise noted.) 

CMS is providing for deemed approval 

so that CMS and States can take quick 

action to implement any strategies or 

system changes needed to correct 

identified violations of the reporting or 

redetermination requirements to 

promote sustained compliant operations 

and beneficiary coverage. 

Section 430.49(b)(5) provides that 

CMS will consider the following in 

determining whether to approve a CAP 

submitted by a State: (1) whether the 

CAP will promptly eliminate or 

minimize any harm or risk of harm to 

beneficiaries, including increased 

burden for beneficiaries in completing 

the renewal process, loss of coverage at 

renewal for individuals who continue to 

meet the substantive eligibility criteria 

and whose eligibility should otherwise 

be retained but for failure to meet a 

procedural requirement, and delays in 

access to coverage or care, due to the 

noncompliance to be addressed by the 

plan; and (2) whether the CAP will 

result in the State achieving compliance 

in a reasonable time, taking into account 

systems challenges and circumstances 

faced by the agencies involved. Systems 

challenges that could impact the 

timeframe in which a State can achieve 

compliance could include, for example, 

the timeframe needed to update coding 

for a State’s eligibility system, the need 

to create policy manuals to guide 

workers on use of new system 

functionality, training workers on new 

system changes, and/or the creation and 

implementation of new forms or 

functions to receive or track information 

in the renewal process. 

As discussed further in section II.E. 

and § 430.49(d)(1) and (2), CMS will 

consider certain mitigating 

circumstances before issuing a notice 

directing a State to submit a CAP in 

accordance with the requirements at 

§ 430.49(b). 

D. Suspension of Procedural 

Disenrollments and Civil Money 

Penalties (§ 430.49(c)) 

Under section 1902(tt)(2)(B)(iii) of the 

Act, as implemented at § 430.49(c) of 

this rule, if a State fails to submit or 

implement an approved CAP, including 

if CMS disapproves the State’s 

submitted CAP or if the State fails to 

meet the requirements set forth in the 

approved CAP, in accordance with 

section 1902(tt)(2)(B)(ii) of the Act, the 

Secretary may, after consideration of 

any mitigating circumstances described 

in section II.E. of this rule and at new 

§ 430.49(d)(3), and in addition to any 

reduction applied to the FMAP under 

section 1902(tt)(2)(A) of the Act, take 

either or both of the following actions: 

(1) require the State to suspend making 

some or all disenrollments from 

Medicaid that are for procedural reasons 

until the State takes appropriate 

corrective action; (2) impose CMPs of 

not more than $100,000 for each day a 

State is not in compliance. 

Under new § 430.49(c)(2), prior to 

taking either or both of these 

enforcement actions, CMS will issue a 

notice to the State. Such notice will 

include: (1) a description of the 

enforcement actions CMS is taking and 

the basis for such action(s); (2) whether 

CMS is requiring suspension of some or 

all procedural disenrollments, and in 

the case of a partial suspension, the 

affected populations; (3) the date on 

which the State must begin suspending 

procedural disenrollments, if 

applicable; (4) the daily amount of any 

CMPs imposed, the date that assessment 

of the CMPs will begin, the timeline for 

payment (including information on how 

the timeline for payment would be 

affected by an appeal), and instructions 

on how to submit payment; (5) the steps 

the State must take to cure its 

noncompliance and for CMS to lift the 

enforcement action(s); (6) information 

on the State’s appeal rights as described 

in section II.G and at new § 430.49(f) of 

this rule, including the deadline to 

submit an appeal request and the effect 

of requesting an appeal on the 

applicability of any enforcement actions 

pending the decision in such appeal. 


lotter on DSK11XQN23PROD with RULES1
84722 Federal Register / Vol. 88, No. 233 / Wednesday, December 6, 2023 / Rules and Regulations 

21Section 1902(tt)(2)(B)(iii) of the Act provides 

(emphasis added): If a State fails to submit or 

implement an approved corrective action plan in 

The notice must also provide that the 

decision outlined in the notice is final 

unless it is timely appealed as described 

in § 430.49(f). Section 430.49(c)(2)(ii) 

also provides that CMS may issue 

additional notices to take additional 

actions (for example, increasing CMPs 

or adding or increasing the scope of a 

suspension of procedural 

disenrollments) if CMS identifies 

additional violations of a CAP’s 

provisions. Such notices will meet the 

requirements outlined in 

§ 430.49(c)(2)(i). 

Suspension of Procedural 

Disenrollments. As noted in this rule, if 

CMS finds that a State has failed to 

submit or implement an approved CAP 

in accordance with the requirements in 

section 1902(tt)(2)(B) of the Act, section 

1902(tt)(2)(B)(iii) of the Act provides 

that CMS may require the State to 

suspend either some or all procedural 

disenrollments of Medicaid eligibility. 

We believe it is appropriate to target any 

procedural disenrollment suspension to 

protect those beneficiaries impacted by 

the State’s noncompliance. If CMS 

requires the State to suspend procedural 

disenrollments, the scope of that 

requirement will be based upon the 

impact of the noncompliance that led to 

the requirement for the CAP. 

Accordingly, under § 430.49(c)(3)(i), if 

the impact of the noncompliance 

requiring a CAP affects a substantial 

number of (meaning all or nearly all) 

individuals in the State who are or 

should have been found eligible for 

Medicaid, CMS may require the State to 

suspend all procedural disenrollments. 

If the impact of the noncompliance is 

limited, for example to a specific 

population or geographic area, CMS 

may limit the suspension only to the 

affected population(s). In cases where 

CMS initially limits the requirement to 

suspend procedural disenrollments to 

an affected population or area, CMS 

may later opt to require the State to 

suspend all procedural disenrollments if 

CMS subsequently determines that the 

impact of the noncompliance is greater 

than was initially determined or if the 

State fails to comply with the initial 

requirement to suspend procedural 

disenrollments for a targeted population 

or area in accordance with the notice 

issued under § 430.49(c)(2). In these 

circumstances, CMS will issue a 

subsequent notice under § 430.49(c)(2). 

CMS believes that suspension of 

procedural disenrollments is an 

effective and necessary enforcement tool 

to protect beneficiaries from harm due 

to a State’s noncompliance and, except 

in one limited circumstance discussed 

in section II.E of this rule, will always 

require States that have failed to submit 

an approvable CAP or to implement an 

approved CAP to suspend some or all 

procedural disenrollments. 

After CMS requires a State to suspend 

procedural disenrollments, the State 

must continue suspending procedural 

disenrollments until CMS determines 

that the State has taken appropriate 

corrective action. Once CMS is satisfied 

that the State has taken appropriate 

corrective action, CMS will inform the 

State of the date on which it may 

resume procedural disenrollments. See 

section II.F of this rule for a discussion 

of the circumstances under which CMS 

will lift enforcement actions taken 

pursuant to an enforcement notice 

issued in accordance with § 430.49(c). 

Civil Money Penalties. If CMS finds 

that a State has failed to submit or 

implement an approved CAP, including 

if CMS disapproves the State’s 

submitted CAP or if the State fails to 

meet the requirements set forth in the 

approved CAP, in accordance with the 

requirements in 1902(tt)(2)(B)(ii) of the 

Act and as interpreted at § 430.49(b) of 

this rule, CMS may also issue notice to 

the State in accordance with 

§ 430.49(c)(2) indicating that CMS will 

impose CMPs. 

The CMPs authorized under section 

1902(tt)(2)(B)(ii) are a tool to compel 

State compliance with corrective action 

as quickly as possible, given the urgency 

of preventing unauthorized loss of 

coverage for beneficiaries during a 

period that generally aligns with States’ 

unwinding periods. For this reason, 

CMS is adopting a penalty formula that 

will impose a lower penalty for States 

with a shorter timeframe of 

noncompliance and increase the penalty 

over time for States that do not return 

to compliance. CMPs will start accruing 

5 days after the date of the notice and 

become payable 60 days after the date 

of the notice, if not timely appealed, or 

60 days after issuance of a final 

determination at the conclusion of any 

appeals pursuant to § 430.49(f). Under 

§ 430.49(c)(3)(ii)(B) of this rule, CMS 

will impose CMPs for failure to submit 

or implement an approved CAP 

according to the following formula: 

Days 1–30 (after 5-day delay as specified 

in the enforcement notice): $25,000/day; 

Days 31–60: $50,000/day; and Days 61– 

until State comes into compliance with 

CAP requirements: $100,000/day. All 

CMP amounts provided in this rule will 

be adjusted annually in accordance with 

45 CFR part 102. 

New § 430.49(c)(2)(ii) provides that 

CMS may issue additional notices to 

take additional actions (including 

increasing CMPs or imposing or 

broadening the scope of a suspension of 

procedural disenrollments) if CMS 

identifies additional violations of CAP 

provisions. Such notices will meet the 

requirements in 430.49(c)(2)(i). 

Noncompliant States will be charged 

CMPs daily until the State takes 

appropriate action to cure the 

noncompliance with the CAP 

requirements as outlined in § 430.49(e) 

and discussed in section II.F. of this 

rule. Under § 430.49(e)(2), once CMS is 

satisfied that the State has taken 

appropriate action to cure the 

noncompliance with the CAP 

requirements, CMS will inform the State 

of the total amount of CMPs that have 

accrued, the balance owed if the State 

has already begun payment, and the last 

day CMPs under the enforcement notice 

were imposed. 

As provided in § 430.49(c)(4), if the 

State fails to suspend procedural 

disenrollments as required pursuant to 

a notice described in § 430.49(c)(2) or to 

pay CMPs as specified in that notice, or 

both, CMS may issue a subsequent 

notice under § 430.49(c)(2) to increase 

the CMPs to the maximum allowable 

daily amount, if not already reached, or 

may pursue additional enforcement 

action under section 1904 of the Act, 

including withholding some or all FFP 

for the period of noncompliance. 

CMS intends to issue additional 

guidance following the issuance of this 

rule providing additional information 

regarding the process CMS will use to 

collect CMPs and any operational 

requirements for States to remit 

payment of CMPs. 

E. Mitigating Circumstances 

(§ 430.49(d)) 

As described previously, section 

1902(tt)(2)(B) of the Act, as 

implemented in new § 430.49, gives 

CMS the authority to require States to 

submit a CAP for failure to meet 

reporting or Federal redetermination 

requirements and, if the State fails to 

submit or implement such CAP, 

including if CMS disapproves the 

State’s submitted CAP or if the State 

fails to meet the requirements set forth 

in the approved CAP, in accordance 

with section 1902(tt)(2)(B)(ii) of the Act, 

to suspend procedural disenrollments, 

impose CMPs of up to $100,000 per day, 

or take both actions. While section 

1902(tt)(2)(B) of the Act empowers CMS 

to require CAPs, suspend procedural 

disenrollments, and impose CMPs, the 

statute also gives the Secretary 

discretion to use this authority or not 

and to determine the amount of CMPs 

up to the statutory maximum.21


lotter on DSK11XQN23PROD with RULES1
Federal Register / Vol. 88, No. 233 / Wednesday, December 6, 2023 / Rules and Regulations 84723 

accordance with clause (ii), the Secretary may . . . 

require the State to suspend making all or some 

terminations of eligibility for medical assistance 

from the State plan under this title (including any 

waiver of such plan) that are for procedural reasons 

until the State takes appropriate corrective action, 

as determined by the Secretary, and may impose a 

civil money penalty of not more than $100,000 for 

each day a State is not in compliance. 

22CMS has also used its discretion in setting the 

amount of the CMPs that will apply in certain 

circumstances, based on the duration of the CAP 

violation involved, as discussed above in section 

II.D. 

CMS interprets the enforcement 

authorities in section 1902(tt)(2) of the 

Act as tools to promote State 

accountability for compliance with the 

reporting requirements in section 

1902(tt)(1) of the Act and Federal 

redetermination requirements, as 

defined in § 430.5 of this rule, and to 

maximize accurate eligibility 

redeterminations to promote retention 

of coverage for eligible people to the 

greatest extent feasible. CMS recognizes 

that the scope or impact of different 

violations of the reporting or 

redetermination requirements may vary, 

and there also may be an emergency or 

other extraordinary circumstances 

preventing a State from complying with 

a given requirement or submitting or 

implementing a CAP. Thus, consistent 

with the discretion allowed under 

section 1902(tt)(2)(B) of the Act, CMS 

will take into consideration certain 

mitigating circumstances related to the 

State’s noncompliance when 

determining whether to require the State 

to submit a CAP or require suspension 

of procedural disenrollments or impose 

CMPs. These circumstances are set forth 

at § 430.49(d) of this rule.22

Mitigating Circumstances Impacting 

Decision to Require a CAP. In the case 

of State noncompliance with Federal 

redetermination requirements, 

§ 430.49(d)(1) provides that CMS may 

elect to not require or to delay requiring 

submission of a CAP if either or both of 

the following circumstances exist: 

1. No Harm or Substantial Risk of 

Harm Occurred: The noncompliance 

caused neither actual harm nor a 

substantial risk of harm to beneficiaries, 

including increased burden for 

beneficiaries in completing the renewal 

process, loss of coverage at renewal for 

individuals who continue to meet the 

substantive eligibility criteria and 

whose eligibility should otherwise be 

retained but for failure to meet a 

procedural requirement, or delays in 

access to coverage or care. 

2. Extraordinary Circumstances Exist: 

There is an emergency or there are other 

extraordinary circumstances preventing 

the State’s compliance—for example, a 

natural disaster or catastrophic systems 

outage. 

In addition, in the case of 

noncompliance with the reporting 

requirements in § 435.927, 

§ 430.49(d)(2) provides that CMS may 

delay requiring or elect not to require a 

State to submit a CAP if CMS has 

determined that the State implementing 

a CAP is not necessary to ensure that the 

noncompliance is remedied. For 

example, CMS might not require a CAP 

if a State’s noncompliance is due to an 

error that the State commits to 

correcting and does immediately 

correct. As with violations relating to 

Federal redetermination requirements, 

CMS may also delay requiring or elect 

not to require a State to submit a CAP 

relating to a violation of reporting 

requirements if CMS determines that 

there is an emergency or other 

extraordinary circumstances preventing 

the State’s compliance. 

Mitigating Circumstances Impacting 

Decision to Suspend Procedural 

Disenrollments or Impose CMPs. If a 

State fails to submit an approvable CAP 

or to implement an approved CAP, 

including if CMS disapproves the 

State’s submitted CAP or if the State 

fails to meet the requirements set forth 

in the approved CAP, new § 430.49(d)(3) 

provides that CMS will consider 

whether any of the following mitigating 

circumstances exist when deciding 

whether to require a suspension of 

procedural disenrollments, impose 

CMPs, or take both actions: 

1. Extraordinary Circumstances Exist: 

Regardless of the type of violation that 

gave rise to the requirement of a CAP, 

CMS will consider whether there is an 

emergency or other extraordinary 

circumstance that occurred after the 

violation resulting in the requirement of 

a CAP that significantly impeded the 

State’s ability to submit or implement 

the CAP. If such circumstances exist, 

CMS may delay or forgo imposition of 

CMPs but will not delay requiring a 

suspension of procedural 

disenrollments (beyond the one-month 

delay described below in the case of 

reporting violations that do not impede 

CMS’ oversight of procedural 

disenrollments). 

2. Reporting Violation Does Not 

Impede CMS’ Oversight of Procedural 

Disenrollments: When a State fails to 

submit or implement an approved CAP 

that was required based on the State’s 

violation of reporting requirements 

under section 1902(tt)(1) of the Act, 

CMS will consider whether the 

underlying reporting violation impedes 

CMS’ oversight of procedural 

disenrollments. If so, CMS will suspend 

procedural disenrollments and impose 

CMPs. If not, CMS will delay requiring 

a suspension of procedural 

disenrollments for 1 month to allow the 

State an opportunity to comply with the 

data reporting requirements but will 

immediately impose CMPs (unless 

extraordinary circumstances exist, as 

discussed above). 

Although all data reporting under 

section 1902(tt)(1) of the Act is 

important to support CMS oversight of 

State redetermination processes during 

a period that generally aligns with 

States’ unwinding periods, we believe 

that in most cases it would be too 

punitive to suspend procedural 

disenrollments immediately if the State 

fails to submit or implement a CAP 

related to an underlying reporting 

requirement violation that does not 

impede CMS’ understanding of the 

State’s procedural disenrollment rate. In 

contrast, where a State fails to submit or 

implement a CAP related to an 

underlying reporting violation that 

impedes CMS’ oversight of procedural 

disenrollments in that State, CMS will 

take immediate action to require 

suspension of procedural 

disenrollments, in addition to imposing 

CMPs (if not delayed or forgone by CMS 

due to the existence of extraordinary 

circumstances), to mitigate possible 

harm to beneficiaries at risk of 

disenrollment. 

For example, if a State fails to submit 

or implement an approved CAP that 

CMS required based upon the State’s 

failure to report data on the volume of 

calls it is receiving at a call center, CMS 

will examine the circumstances of the 

underlying reporting violation and may 

find that the lack of these data does not 

impede its oversight of procedural 

disenrollments and, if so, will delay 

requiring the State to suspend 

procedural disenrollments for 1 month, 

pending the submission or 

implementation of a CAP or the 

correction of the underlying reporting 

violation, but will impose CMPs 

according to § 430.49(c)(3)(ii) without 

delay (unless there has been an 

extraordinary circumstance after the 

violation occurred that prevented the 

State from submitting or implementing 

the CAP). 

F. Lifting of CAP Enforcement Actions 

(§ 430.49(e)) 

Under § 430.49(e)(1) of this rule, CMS 

will lift any requirement to suspend 

procedural disenrollments and/or stop 

charging any CMPs imposed pursuant to 

§ 430.49(c) when the State cures its 

noncompliance by submitting an 

approvable CAP (where the violation 

was a failure to submit a CAP) or 

initiating or resuming implementation 


lotter on DSK11XQN23PROD with RULES1
84724 Federal Register / Vol. 88, No. 233 / Wednesday, December 6, 2023 / Rules and Regulations 

of an approved CAP (where the 

violation was a failure to implement 

according to the terms of the CAP). In 

cases where the State had received a 

notice imposing CMPs due to failure to 

submit an approved CAP, CMS will 

continue the accrual of CMPs from the 

date that a State submits a CAP for CMS 

review in accordance with 

§ 430.49(e)(1)(i)(A), until CMS 

determines whether the CAP is 

approvable. If CMS determines the CAP 

is approvable, CMS will retroactively 

end the accrual of CMPs on the day the 

CAP was submitted and cease charging 

CMPs prospectively. If CMS determines 

that the CAP is not approvable, CMS 

will continue charging CMPs imposed 

under the terms of the enforcement 

notice without interruption from the 

date specified in the original notice 

provided to the State under 

§ 430.49(c)(2) and will continue 

charging such CMPs until an approvable 

CAP is submitted. Under § 430.49(e)(2), 

once CMS is satisfied that the State has 

taken appropriate action to cure the 

noncompliance with the CAP 

requirements, CMS will inform the State 

of the total amount of CMPs that have 

accrued, the balance owed, and the last 

day CMPs were imposed as well as the 

date on which the State may resume 

procedural disenrollments. 

CMS may again require suspension of 

procedural disenrollments and impose 

CMPs that have been lifted in 

accordance with § 430.49(e)(1) if CMS 

subsequently determines that the State 

is not complying with the terms of the 

approved CAP. In such a situation, CMS 

will issue a new notice pursuant to 

§ 430.49(c)(2). 

G. State Reconsideration and Appeal 

Rights (42 CFR 430.3, 430.49(f), and 45 

CFR Part 16) 

Under new § 430.49(f) and 

amendments to § 430.3 and 45 CFR part 

16, States will be able to appeal CMS’ 

decision to require a State to suspend 

procedural disenrollments and/or pay 

CMPs under section 1902(tt)(2)(B)(iii) of 

the Act and new § 430.49(c). The rule 

amends § 430.3 and 45 CFR part 16, 

Appendix A, to provide that States can 

appeal these CMS decisions to the 

Departmental Appeals Board (Board) in 

accordance with procedures set forth in 

45 CFR part 16. 

The rule creates a new 42 CFR 

430.49(f)(1), providing that a State 

dissatisfied with CMS’ determination 

under § 430.49(c) that the State must 

suspend procedural disenrollments or 

pay CMPs will have 30 days (as counted 

consistent with the protocol for 

counting days outlined under 45 CFR 

16.19) from receipt of the notice 

described in § 430.49(c)(2) to appeal 

CMS’s decision to the Board. The appeal 

request must comply with 45 CFR 16.7, 

and the appeals process will be 

governed by 45 CFR part 16. That means 

that the expedited appeal procedures 

outlined in 45 CFR 16.12 might be 

available, if the conditions in 45 CFR 

16.12 are met. If the State does not 

submit an appeal request within that 30- 

day timeframe, then the decision 

described in the notice received by the 

State under § 430.49(c)(2) is the final 

decision of the Secretary and is final 

agency action within the meaning of 5 

U.S.C. 704. 

At new 42 CFR 430.49(f)(2), we give 

any party to the appeal that is 

dissatisfied with the Board’s decision 

under 430.49(f)(1) an opportunity to 

request that the CMS Administrator 

reconsider it, and we outline the process 

that will govern the Administrator’s 

reconsideration. In particular, new 

§ 430.49(f)(2)(i) specifies that any party 

to the appeal that is dissatisfied with the 

Board’s decision on an appeal brought 

by a State under § 430.49(f)(1) may 

request reconsideration of that decision 

within 15 days of receiving notice of the 

decision under 45 CFR 16.21. The 

process for such reconsiderations is 

provided under new § 430.49(f)(2)(i)(A) 

through (D). Under new 

§ 430.49(f)(2)(i)(A), we are providing 

that reconsideration requests must be 

filed with the Administrator, and must 

include a copy of the Board’s decision, 

a brief statement of why the party 

believes it was wrong, and a statement 

of the amount of any CMPs in dispute. 

New § 430.49(f)(2)(i)(B) requires that the 

party requesting reconsideration send a 

copy of the request for reconsideration 

to all other parties to the appeal and 

other participants in the appeal (as 

described in 45 CFR 16.16) at the same 

time the request is filed. New 

§ 430.49(f)(2)(i)(C) provides that any 

other party to the appeal, or other 

participant in the appeal, may respond 

to the request for reconsideration in 

writing and file such response with the 

Administrator within 15 days of the 

date the request for reconsideration is 

filed with the Administrator. Under new 

§ 430.49(f)(2)(i)(D), the Administrator 

will review the Board’s decision and 

any additional information submitted by 

the parties and other participants, and 

either affirm the Board’s decision or 

issue a new decision within 60 days 

after the Board issues notice of its 

decision under 45 CFR 16.21. Under 

new § 430.49(f)(2)(ii), the Administrator 

may, within 60 days after the Board 

issues notice of its decision under 45 

CFR 16.21, also modify or reverse the 

Board’s decision without receiving a 

request for reconsideration under 

§ 430.49(f)(2). In cases where the 

Administrator opts to review the 

Board’s decision without a request for 

reconsideration, such decision must be 

provided within 60 days of the Board’s 

issuance of its notice of decision under 

45 CFR 16.21. 

New § 430.49(f)(2)(iii) states that if 

there is no request for reconsideration 

filed under § 430.49(f)(2)(i) and the 

Administrator does not modify or 

reverse the decision within the 60-day 

period described in § 430.49(f)(2)(ii), 

then the Board’s decision will be the 

final determination of the Secretary and 

final agency action, and the 

Administrator will provide notice to all 

parties and other participants of such 

decision as described in 

§ 430.49(f)(2)(iv). New § 430.49(f)(2)(iv) 

provides that the Administrator will 

provide a notice to all parties and other 

participants of the final decision that 

communicates that it is the final 

determination of the Secretary and final 

agency action and § 430.49(f)(2)(v) 

provides that the determination of the 

Administrator pursuant to 

§§ 430.49(f)(2)(i)(D) or 430.49(f)(2)(ii) 

constitutes final agency action within 

the meaning of 5 U.S.C. 704. 

Under amendments in the rule to 45 

CFR 16.22, any suspensions of 

procedural disenrollments under 42 

CFR 430.49(c) will continue in effect 

and CMPs imposed on a State under 

430.49(c) will continue to accrue 

pending an appeal to the Board under 

§ 430.49(f). 

Appeals of CMS decisions to take the 

FMAP reduction under section 

1902(tt)(2)(A) of the Act will follow a 

different process that is governed by 

already existing regulations. If CMS 

finds that a State is noncompliant with 

reporting requirements under § 435.927, 

CMS will calculate the amount of the 

FMAP reduction under § 435.928 and 

request that the State make a voluntary 

adjustment to the Form CMS–64 to 

return the funds to CMS. If the State 

does not do so, CMS will initiate 

disallowance proceedings, which will 

be governed by existing regulations at 

§ 430.42. States may request 

reconsideration or appeal disallowance 

decisions per these existing CMS 

regulations at § 430.42. Under § 430.42, 

States wishing to request a 

reconsideration of the Administrator’s 

decision to impose a disallowance must 

request such reconsideration within 60 

days of receiving the notice of 

disallowance described in § 430.42(a). 

We are adding new § 430.49(f) and 

amending § 430.3 and 45 CFR part 16 as 

outlined in this section to provide States 


lotter on DSK11XQN23PROD with RULES1
Federal Register / Vol. 88, No. 233 / Wednesday, December 6, 2023 / Rules and Regulations 84725 

23Medicaid and CHIP National Summary of 

Renewal Outcomes—March Through July 2023 

Data; published October 2023; available at https:// 

www.medicaid.gov/sites/default/files/2023-10/july2023-national-summary-renewal-outcomes.pdf. 

24ASPE (August 19, 2022). Unwinding the 

Medicaid Continuous Enrollment Provision: 

Projected Enrollment Effects and Policy 

Approaches. (Available at https://aspe.hhs.gov/ 

sites/default/files/documents/404a7572048090

ec1259d216f3fd617e/aspe-end-mcaid-continuouscoverage_IB.pdf). 25ASPE (April 11, 2021). Medicaid Churning and 

Continuity of Care. (Available at https://

aspe.hhs.gov/reports/medicaid-churningcontinuity-care). 26Abdus, S. (August 2014). Part-year Coverage 

and Access to Care for Nonelderly Adults. 

(Available at https://journals.lww.com/lwwmedicalcare/Fulltext/2014/08000/Part_year_

Coverage_and_Access_to_Care_for.6.aspx). 

with a fair and reasonable 

administrative process for appealing 

CMS’ decisions to suspend procedural 

disenrollments or impose CMPs and to 

ensure that accountability for those 

decisions is vested in a principal officer. 

These changes also will provide States 

with accurate information about the 

availability of administrative review if 

they are dissatisfied with a CMS 

decision under 42 CFR 430.49(c). These 

provisions also clarify when agency 

decisions are final agency action for 

purposes of 5 U.S.C. 704. 

H. Definitions (§ 430.5) 

This rule adds two new definitions to 

§ 430.5 that apply to the provisions at 

§ 430.49. One of the two new definitions 

will also apply to related amendments 

to 45 CFR part 16. First, the rule defines 

a ‘‘procedural disenrollment’’ for 

purposes of 42 CFR 430.49 and 45 CFR 

part 16 as a termination of eligibility 

and disenrollment from Medicaid for 

reasons that are unrelated to a State’s 

determination of whether the individual 

meets eligibility criteria to qualify for 

coverage, including for failure to return 

a renewal form or documentation 

needed by the State to make a 

determination of eligibility. And 

second, the rule defines ‘‘Federal 

redetermination requirements’’ for 

purposes of 42 CFR 430.49 as Federal 

requirements applicable to eligibility 

redeterminations outlined in § 435.916, 

including renewal strategies authorized 

under section 1902(e)(14)(A) or other 

alternative processes and procedures 

approved by CMS under section 

1902(e)(14)(A) of the Act or section 

6008(f)(2)(A) of the FFCRA. 

III. Good Cause 

The Administrative Procedure Act 

(APA), at 5 U.S.C. 553(b), requires the 

agency to publish a notice of the 

proposed rule in the Federal Register 

that includes a reference to the legal 

authority under which the rule is 

proposed and the terms and substance 

of the proposed rule or a description of 

the subjects and issues involved. 

Section 553(c) further requires the 

agency to give interested parties the 

opportunity to participate in the 

rulemaking through public comment 

before the provisions of the rule take 

effect. Section 553(b)(B) provides an 

exception to notice-and-comment 

requirements, however, if the agency for 

good cause finds that notice-andcomment is impracticable, unnecessary, 

or contrary to the public interest and 

incorporates a statement of the finding 

and its reasons in the rule issued. 

Section 553(d) ordinarily requires a 

30-day delay in the effective date of a 

final rule from the date of its 

publication in the Federal Register. 

However, similar to the good cause 

exception for notice-and-comment 

requirements, section 553(d)(3) excepts 

a rule from the 30-day delay 

requirement if the agency for good cause 

finds that the delay is impracticable, 

unnecessary, or contrary to the public 

interest. Similarly, the Congressional 

Review Act (CRA) also allows an agency 

to issue a rule that would otherwise be 

subject to a 60-day delayed effective 

date requirement with an immediate 

effective date in circumstances where a 

delay is impractical, unnecessary, or 

contrary to the public interest (5 U.S.C. 

808(2)). CMS is forgoing the usual 

notice-and-comment procedures and 

delay in the effective date for this rule 

because, for the reasons discussed in 

this section, following such 

requirements would be impracticable 

and contrary to the public interest. 

Recent data on unwinding-related 

renewals indicates that of the 7.1 

million Medicaid and CHIP 

beneficiaries whose eligibility was due 

for renewal in July 2023, more than 1.6 

million had been disenrolled.23 The vast 

majority of these disenrolled 

individuals (71 percent) were 

disenrolled due to a procedural reason 

such as failure to return paperwork, not 

because of a determination that the 

person no longer satisfied Medicaid’s 

substantive eligibility criteria. While we 

are unable to determine the proportion 

of individuals who were procedurally 

disenrolled but continued to meet 

substantive eligibility criteria, the high 

rate of procedural disenrollments 

suggests that the options and strategies 

that CMS has been working with States 

to implement through their mitigation 

plans may not be sufficient to protect 

the continued enrollment of individuals 

who continue to meet substantive 

eligibility criteria. For this reason, the 

enforcement authorities established 

under this rule are needed to protect 

access to Medicaid coverage. Any delay 

in implementing the enforcement tools 

in this rule would thwart CMS’s ability 

to take an array of possible enforcement 

actions against noncompliant States 

under section 1902(tt) of the Act and 

could result in serious harm to 

beneficiaries. 

In anticipating the likely impact of 

unwinding, the Assistant Secretary for 

Planning and Evaluation (ASPE) in HHS 

estimated that in the period between 

April 1, 2023, and June 1, 2024, 6.8 

million people will lose Medicaid 

coverage despite still meeting 

substantive eligibility criteria.24 ASPE 

estimated that 82.7 percent of enrollees 

would be determined eligible, and their 

eligibility would be renewed, while 17.5 

percent would be disenrolled. Of those 

disenrolled, ASPE estimated 54 percent 

would be disenrolled because they were 

determined ineligible, and 45 percent 

(6.8 million) would be disenrolled for 

procedural reasons despite still meeting 

substantive eligibility criteria. Early 

unwinding data from May and June 

2023 renewals show a higher percentage 

of renewals resulting in disenrollment 

(nearly 38 percent in May and just over 

25 percent in June) and a significantly 

higher percentage of disenrollments 

occurring for procedural reasons (77 

percent in May and 73 percent in June) 

compared to ASPE’s estimates. While 

these early data are limited, if 

disenrollments continue at the June 

2023 rates, the number of individuals 

who lose Medicaid coverage for 

procedural reasons will be much higher 

than ASPE’s estimates, and many of 

those individuals may still meet 

substantive Medicaid eligibility criteria. 

If CMS is unable to take all actions 

within its authority to enforce Federal 

redetermination requirements, the 

number of individuals negatively 

impacted may increase. 

Analyses indicate that Medicaid 

coverage loss could have significant 

detrimental consequences, resulting in 

forgone medical care, including 

preventive care, that could result in 

refilling prescriptions less often, more 

emergency department visits, and 

increased morbidity and mortality.25 26

Preventable coverage loss could result 

from States’ failure to follow Federal 

requirements, which CMS cannot fully 

enforce without this rulemaking. Loss of 

coverage by individuals who still meet 

substantive eligibility criteria, which is 

likely followed by re-enrollment at a 

later point in time, is often referred to 

as ‘‘churning.’’ Because churning can 

lead to deferred or delayed care, it can 

result in greater health care costs; such 

disruptions in care and medication 


lotter on DSK11XQN23PROD with RULES1
84726 Federal Register / Vol. 88, No. 233 / Wednesday, December 6, 2023 / Rules and Regulations 

27Sommers, B.D., Gourevitch, R., Maylone, B., 

Blendon, R.J., Epstein, A.M. (2016). Insurance 

churning rates for low-income adults under health 

reform: Lower than expected but still harmful for 

many. Health Affairs, 35(10), 1816–1824. 

28 Guevara, J.P., Moon, J., Hines, E.M., Fremont, 

E., Wong, A., Forrest, C.B., Silber, H.H., & Pati, S. 

(2014). Continuity of public insurance coverage: A 

systematic review of the literature. Medical Care 

Research and Review, 71(2), 115–137. 

29Brantley, E., Ku, L. (2022). Continuous 

eligibility for Medicaid associated with improved 

child health outcomes. Medical Care Research and 

Review, 79(3), 404–413. 

adherence create negative health 

outcomes that make care more costly 

down the road.27

By contrast, continuous enrollment 

permits individuals to maintain a 

regular source of care, including 

preventive care and ongoing treatment 

of chronic conditions. A review of the 

research available on continuous 

enrollment of children found it is 

related to reductions in unmet health 

care needs, increases in coordination of 

care, including monitoring and regular 

treatment adjustments as conditions 

change, and greater patient/provider 

engagement in treatment planning, 

which can lead to better health 

outcomes.28 In fact, a study of health 

care outcomes in States that provided 

continuous eligibility to children prior 

to the FFCRA’s continuous enrollment 

condition found reductions in insurance 

gaps, lower probability of children being 

in fair or poor health, and, for children 

with serious health care needs, 

increased access to preventive and 

specialty care.29 This evidence suggests 

that protecting access to coverage leads 

to better outcomes for enrollees. The 

availability of these enforcement tools is 

critically important to ensure that CMS 

can act quickly, if needed, to address 

State noncompliance. Delaying CMS’ 

access to the full range of the 

enforcement tools it could employ to 

require States to follow Federal 

eligibility redetermination requirements 

and the new reporting requirements in 

section 1902(tt)(1) of the Act, could thus 

cause actual harm to beneficiaries. 

As discussed, State submission of 

renewal data is critically important to 

our ability to monitor State renewal 

processes and take action when needed 

to prevent unauthorized disenrollments. 

CMS must be able to use the compliance 

tools under section 1902(tt) of the Act 

to obtain data from States that will help 

us to continue to quickly identify 

problems with the redetermination 

process during the period from April 1, 

2023, through June 30, 2024, and, if 

needed, to take timely action to require 

States to fix problems including, if 

appropriate, requiring States to halt 

procedural disenrollments from 

Medicaid. 

This rule provides critical guidance to 

help States ensure that they are 

complying with the data reporting 

requirements under section 1902(tt)(1) 

of the Act and that they understand how 

CAPs and CMPs will be administered in 

the event that a State does not take all 

actions necessary for compliance. For 

example, the rule provides States with 

certainty regarding how CMS will 

interpret the requirement to report 

certain data under section 1902(tt)(1) of 

the Act on a timely basis. A delay in the 

issuance of guidance resulting from the 

notice-and-comment process would 

forestall States’ ability to be compliant 

with Federal requirements that protect 

beneficiaries. 

CMS sees the enforcement 

authorities—CAPs, suspensions of 

procedural disenrollments, and CMPs— 

as tools to promote State accountability 

for compliance with the reporting and 

redetermination requirements, and we 

recognize that the scope or impact of 

different violations of these 

requirements may vary. Thus, we 

believe it is important to consider 

certain mitigating circumstances when 

determining whether to require a State 

to submit a CAP or to require a 

suspension of procedural 

disenrollments or impose CMPs. This 

rule gives States additional information 

about the factors that CMS will weigh in 

deciding whether to require CAPs, to 

require States to suspend procedural 

disenrollments, or to impose CMPs. 

CMS needs to be able to focus its 

limited enforcement resources on the 

most serious noncompliance. Without 

this flexibility, CMS would be required 

to tie up our limited resources on 

enforcement actions in situations where 

mitigating circumstances would weigh 

against such action. This could 

seriously inhibit or even prevent CMS 

from taking truly needed enforcement 

action if a situation were to arise 

involving serious noncompliance 

causing harm or a substantial risk of 

harm. 

Recognizing the importance of the 

guidance in this rule, CMS has moved 

as quickly as possible within existing 

constraints to complete rulemaking. 

Section 1902(tt) of the Act was enacted 

via the CAA, 2023, on December 29, 

2022, took effect 3 months later, on 

April 1, 2023, and applies to a timelimited period, from April 1, 2023, to 

June 30, 2024, that began on the day that 

the statutory language took effect. In 

other words, the effective date of section 

1902(tt) of the Act is the same date as 

the start of the compliance period, and 

there was only a 3-month timeframe 

between the passage of the CAA, 2023 

and the effective date. Given the short 

timeframe and the evolving landscape of 

State needs relating to implementation, 

it was not feasible for CMS to have 

issued a final rule (with or without 

notice-and-comment) in that 3-month 

timeframe, because, as is discussed in 

more detail below, CMS’ notice-andcomment rulemaking process ordinarily 

takes at least 18 months. 

Moreover, given the evolving 

landscape of Federal guidance and State 

needs before and after the end of the 

Medicaid continuous enrollment 

condition, it would not have been 

feasible for CMS to begin the 

rulemaking process earlier. When the 

CAA, 2023 was enacted on December 

29, 2022, CMS was immersed in efforts 

to support States as they prepared 

operations for the end of the Medicaid 

continuous enrollment condition. This 

included working with all 56 States 

individually on assessing the need for 

and implementing temporary strategies 

or plans to ensure State compliance 

with Federal Medicaid redetermination 

requirements (often referred to as 

mitigation plans) and issuing new 

guidance and flexibilities to enable 

States to maximize their capacity to 

maintain the enrollment of eligible 

beneficiaries at renewal during the 

unwinding of the Medicaid continuous 

enrollment condition. 

Accelerating the rulemaking process 

was also not a viable option for CMS 

given resource constraints, even if doing 

so would have been feasible. Since 

enactment of the CAA, 2023, CMS has 

devoted an extraordinary amount of 

internal resources to the development of 

materials, review of readiness, and 

availability of technical assistance for 

States as they prepared for and began to 

return to normal eligibility operations 

following the end of the FFCRA 

continuous enrollment condition. We 

created a series of new resources 

designed to assist States in protecting 

the enrollment of eligible individuals as 

they restarted routine Medicaid 

renewals, met with every State to assess 

its planning for unwinding and 

compliance with Medicaid renewal 

requirements, and developed new 

options and strategies through which 

States could address areas of 

noncompliance and mitigate negative 

impacts on eligible individuals. These 

efforts did not stop when the unwinding 

process began, and they continue to 

strain Federal agency resources. During 

roughly the same timeframe, CMS was 

also engaged in an unprecedented 

amount of work to support States, 

health care providers, and Medicare, 

Medicaid, and CHIP beneficiaries in the 


lotter on DSK11XQN23PROD with RULES1
Federal Register / Vol. 88, No. 233 / Wednesday, December 6, 2023 / Rules and Regulations 84727 

30See https://www.cms.gov/files/document/ 

frequently-asked-questions-cms-waiversflexibilities-and-end-covid-19-public-health- emergency.pdf, and https://www.medicaid.gov/ sites/default/files/2023-08/cib050823.pdf. 

transition back to regular operations 

when numerous access-related policies 

and flexibilities ended on May 11, 2023, 

when the COVID–19 PHE (as declared 

by the Secretary under section 319 of 

the Public Health Service Act) ended. 

This included waivers under section 

1135 of the Act that were in place for 

the more than 3 years of that COVID– 

19 PHE.30 Notwithstanding this 

unusual, extraordinary workload 

throughout most of 2023, CMS has 

developed and issued this rule as soon 

as was practicable under the 

circumstances. 

Had CMS proceeded through noticeand-comment rulemaking, the resulting 

delay would have been significant, 

thereby increasing the risk that 

beneficiaries would be harmed by losing 

coverage due to States’ violation of 

Federal redetermination requirements. 

CMS’ rulemaking cycle from proposed 

rulemaking to final rule typically takes 

at least 18 months. This includes 

drafting the proposed rule and engaging 

in a rigorous clearance process that 

concludes with CMS, HHS, and the 

Office of Information and Regulatory 

Affairs leadership approval. A proposed 

rule is typically published in the 

Federal Register with a 60-day public 

comment period, and then CMS must 

review, categorize, and consider the 

public comments received, which may 

number in the thousands. Then the final 

rule can be drafted and enter the same 

rigorous clearance process. If this 

process began immediately upon 

enactment of the CAA, 2023 (December 

29, 2022) and extended 18 months, 

when combined with the usual 30- or 

60-day delay in effective date following

publication in the Federal Register, the

rule would not have taken effect until

the beginning of August 2024 at the 

earliest, 1 month after the compliance 

period ended. In the meantime, CMS 

would have been significantly 

hampered in its efforts to enforce 

Federal redetermination requirements 

and to enforce the reporting 

requirements that help CMS quickly 

become aware of possible State 

violations of those redetermination 

requirements. 

Based on CMS’ early and still ongoing 

work with States and the information 

States have already reported, CMS has 

already observed renewal issues and has 

been working with States to develop 

mitigation plans to address them. As 

that work continues and new issues are 

uncovered, it is important for CMS to be 

able to draw upon the full range of its 

enforcement tools. Additionally, other 

issues may arise in the coming months 

that could require CMS to take swift 

action to the full extent of its 

enforcement authority under section 

1902(tt) of the Act. For example, States 

might fail to comply with requirements 

to provide appropriate notice informing 

beneficiaries of the renewal process and 

the steps needed to renew eligibility, 

may fail to use available and reliable 

information sources to assess 

beneficiaries’ eligibility on an ex parte 

basis, may make a determination of 

ineligibility that is inconsistent with 

eligibility criteria, or may fail to 

appropriately notify the individual of 

the eligibility determination and the 

beneficiary’s right to a fair hearing. In 

any of these circumstances, a major 

State violation of requirements could 

lead to a substantial number of 

beneficiaries being unlawfully 

disenrolled from coverage, creating an 

immediate need for CMS to require 

States to take corrective action to restore 

lost benefits to prevent further harm to 

beneficiaries. Although States and CMS 

have collaboratively worked to mitigate 

these risks in preparing for and 

implementing the end of the Medicaid 

continuous enrollment condition, if a 

State in the future is unwilling or 

unable to comply with Federal renewal 

or reporting requirements, CMS will 

have an urgent need to be able to 

enforce these Federal requirements 

using the enforcement authority 

implemented by this rule. And waiting 

to use that enforcement authority until 

August 2024 would significantly 

undermine CMS’s ability to prevent 

more immediate harm to beneficiaries. 

In addition, unless the rule is issued 

without delay, States would not have 

administrative channels to pursue an 

appeal before any judicial review of the 

actions CMS is authorized to take under 

section 1902(tt)(2)(B)(iii) of the Act. 

Setting forth a clear administrative 

appeals process benefits both States and 

CMS by providing both parties an 

opportunity to resolve disputes 

administratively and thus potentially 

avoid the need for additional judicial 

review, and to generate a clear record 

for any further judicial review in 

Federal court, should it be necessary to 

resolve the dispute. 

For all the reasons cited previously in 

this rule and summarized in Table 1, 

which follows, CMS believes good cause 

exists to exempt this rule from the 

notice-and-comment and delay in 

effective date requirements and is 

proceeding with this rulemaking on an 

expedited basis, to be effective upon 

publication. 

TABLE 1—GOOD CAUSE

Title 

(regulatory citation) Rationale 

Reporting Requirements 

(§ 435.927).

Notice-and-comment rulemaking for § 435.927 is impracticable and contrary to the public interest for the 

following reasons: 

• The timeline for such rulemaking would extend beyond the time period during which the reporting requirements implemented by § 435.927 are in effect.

• Any delay in issuing clear reporting guidance will negatively impact States’ ability to comply with Federal

requirements and will negatively impact CMS’s ability to monitor States’ redetermination processes.

• These reporting requirements will help CMS to determine whether States are meeting Federal redetermination requirements. Unless CMS has this information promptly, during the applicable period, CMS will

be less able to take swift enforcement action to prevent unauthorized coverage loss (or gaps in coverage) for eligible individuals. Coverage loss can lead to forgone care and adverse health outcomes.

FMAP Reduction (§ 435.928) .......... Notice-and-comment rulemaking for § 435.928 is impracticable and contrary to the public interest for the 

following reasons: 

• The timeline for such rulemaking would extend beyond the time period (July 1, 2023, through June 30,

2024) during which State noncompliance could trigger the FMAP reduction described in this section.


lotter on DSK11XQN23PROD with RULES1
84728 Federal Register / Vol. 88, No. 233 / Wednesday, December 6, 2023 / Rules and Regulations 

TABLE 1—GOOD CAUSE—Continued 

Title 

(regulatory citation) Rationale 

• The FMAP reduction implemented in § 435.928 is an important component of the tools available to ensure that States comply with the reporting requirements. Without proper reporting, CMS may be unable 

to effectively monitor States’ compliance with redetermination requirements during the reporting period 

and will be less able to take swift enforcement action to prevent unauthorized coverage loss. This may 

lead to disenrollment of eligible individuals (and/or gaps in their coverage) and result in adverse health 

outcomes. 

Corrective Action Plans (§§ 430.5, 

430.49(b)).

Notice-and-comment rulemaking for § 430.49(b) (along with the definitions at § 430.5 that are applicable to 

this provision) is impracticable and contrary to the public interest for the following reasons: 

• The timeline for such rulemaking would extend beyond the time period (April 1, 2023, to June 30, 2024) 

during which State noncompliance with either the reporting requirements described at § 435.927 or Federal renewal requirements could arise and thereafter be subjected to the CAPs implemented in 

430.49(b). 

• The CAP provisions implemented at § 430.49(b) are an important component of the tools available to ensure that States comply with both the reporting requirements and the Federal redetermination requirements. A delay in implementing these provisions would limit CMS’ authority to quickly minimize preventable loss of coverage or gaps in coverage for eligible individuals when they are identified, which may result in forgone care and adverse health outcomes. 

Suspension of Procedural 

Disenrollments and Civil Money 

Penalties (§§ 430.5, 430.49(c)).

Notice-and-comment rulemaking for § 430.49(c) (along with the definitions at § 430.5 that are applicable to 

this provision) is impracticable and contrary to the public interest for the following reasons: 

• The timeline for such rulemaking would extend beyond the time period (April 1, 2023, to June 30, 2024) 

during which State noncompliance could arise and thereafter be subjected to the enforcement actions 

implemented in 430.49(c). 

• A delay in implementing this statutory authority would limit CMS’ authority to quickly minimize preventable loss of coverage for eligible individuals, which may result in forgone care and adverse health outcomes. 

Mitigating Circumstances (§§ 430.5, 

430.49(d)).

Notice-and-comment rulemaking for § 430.49(d) (along with the definitions at § 430.5 that are applicable to 

this provision) is impracticable and contrary to the public interest, as it would prevent CMS from exercising discretion with respect to the enforcement authority provided by section 1902(tt) of the Act, minimizing its usefulness for enforcing State compliance. CMS needs to be able to focus its limited enforcement resources on the most serious noncompliance. Tying up CMS’s limited enforcement resources on 

enforcement actions in situations where mitigating circumstances would weigh against such action could 

seriously inhibit or even prevent CMS from taking truly needed enforcement action in situations involving 

serious noncompliance causing harm or a substantial risk of harm. 

State Reconsideration and Appeal 

Rights (§ 430.3, 430.49(f), and 

corresponding amendments to 45 

CFR part 16).

Notice-and-comment rulemaking for State reconsideration and appeal rights is impracticable and contrary 

to the public interest for the following reasons: 

• The timeline for such rulemaking would extend beyond the time period (April 1, 2023, to June 30, 2024) 

during which State noncompliance could arise and thereafter be subjected to the enforcement actions 

implemented by this rule. 

• A delay in establishing appeal rights would impede States’ ability to seek administrative resolution to resolve disputes regarding the enforcement actions in this rule without necessitating review in Federal 

court. 

IV. Collection of Information 

Requirements 

Under the Paperwork Reduction Act 

of 1995 (PRA) (44 U.S.C. 3501 et seq.), 

we are required to provide 60-day notice 

in the Federal Register and solicit 

public comment before a ‘‘collection of 

information’’ requirement is submitted 

to OMB for review and approval. For the 

purpose of the PRA and this section of 

the preamble, collection of information 

is defined under 5 CFR 1320.3(c) of the 

PRA’s implementing regulations. 

To fairly evaluate whether an 

information collection should be 

approved by OMB, section 3506(c)(2)(A) 

of the PRA requires that we solicit 

comment on the following issues: 

• The need for the information 

collection and its usefulness in carrying 

out the proper functions of the agency. 

• The accuracy of the estimate of the 

information collection burden. 

• The quality, utility, and clarity of 

the information to be collected. 

• Recommendations to minimize the 

information collection burden on the 

affected public, including automated 

collection techniques. 

We are soliciting public comment on 

each of the section 3506(c)(2)(A)- 

required issues for the following 

information collection requirements. 

A. Wage Estimates 

To derive average costs, we used data 

from the U.S. Bureau of Labor Statistics’ 

May 2021 National Occupational 

Employment and Wage Estimates for all 

salary estimates (http://www.bls.gov/ 

oes/current/oes_nat.htm). In this regard, 

the following table presents the BLS’ 

mean hourly wage, our estimated cost of 

fringe benefits and overhead (calculated 

at 100 percent of salary), and our 

adjusted hourly wage. 

TABLE 2—NATIONAL OCCUPATIONAL AND WAGE ESTIMATES

Occupation title Occupation 

code 

Mean 

hourly wage 

Fringe benefit 

(at 100%) 

Adjusted 

hourly wage 

Database Administrators ......................................................... 15–1242 $49.29 $49.29 $98.58 

General and Operations Manager ........................................... 11–1021 59.07 59.07 118.14 

Management Analyst ............................................................... 13–1111 50.32 50.32 100.64 


lotter on DSK11XQN23PROD with RULES1
Federal Register / Vol. 88, No. 233 / Wednesday, December 6, 2023 / Rules and Regulations 84729 

TABLE 2—NATIONAL OCCUPATIONAL AND WAGE ESTIMATES—Continued 

Occupation title Occupation 

code 

Mean 

hourly wage 

Fringe benefit 

(at 100%) 

Adjusted 

hourly wage 

Project Management Specialists ............................................. 13–1082 48.85 48.85 97.70 

Wages for State Governments. As 

indicated, we are adjusting our 

employee hourly wage estimates by a 

factor of 100 percent to estimate the cost 

of providing fringe benefits. This is 

necessarily a rough adjustment, both 

because fringe benefits and overhead 

costs vary significantly from employer 

to employer, and because methods of 

estimating these costs vary widely from 

study to study. Nonetheless, we believe 

that doubling the hourly wage to 

estimate the total cost including fringe 

benefits is a reasonably accurate 

estimation method. 

Cost to State Governments. To 

estimate State costs, it was important to 

take into account the Federal 

government’s contribution to the cost of 

administering the Medicaid program. 

The Federal government provides 

Medicaid matching funds at a rate 

established in statute. All State 

Medicaid programs generally receive a 

50 percent Federal matching rate for 

qualifying administrative activities. As 

noted previously, States also receive 

higher Federal Medicaid matching rates 

for certain activities, such as certain 

systems design and development, and 

for systems maintenance and 

operations, so the level of Federal 

Medicaid funding provided to a State 

can be significantly higher. As such, 

taking into account the Federal 

contribution to the costs of 

administering the Medicaid program for 

purposes of estimating State burden 

with respect to collection of 

information, we elected to use a 

conservative estimate that the States 

would contribute 50 percent of the 

costs, even though the burden will 

likely be much smaller. 

B. Information Collection Requirements 

(ICRs) 

1. ICRs Related to Reporting 

Requirements (§ 435.927) 

The following changes will be 

submitted to OMB for approval under 

control number 0938–TBD (CMS– 

10875). At this time the control number 

has yet to be determined, but it will be 

assigned by OMB upon their approval of 

this IFC’s collection of information 

request. The public can monitor OMB’s 

issuance of the control number (and the 

control number’s expiration date) at 

reginfo.gov. 

Under § 435.927, States are required 

to submit certain monthly data to CMS. 

The data are already collected by States 

and reported to CMS under existing 

requirements that are approved by OMB 

under control numbers 0938–1119 

(CMS–10371), 0938–0345 (CMS–R–284), 

0938–1140 (CMS–10387), and 0938– 

1148 (CMS–10398 #64). However, 

recognizing that some States might 

encounter unusual circumstances that 

interfere with reporting using existing 

CMS-approved processes, CMS would 

consider approving alternative 

processes and timelines for States to 

report required data if a State is making 

a good faith effort to submit the required 

data, as specified in § 435.927(b)(4). For 

example, CMS would consider allowing 

States experiencing special 

circumstances to submit certain 

summary data via email rather than via 

T–MSIS, if T–MSIS is the existing 

process. 

Based on CMS’ ongoing work with 

States to report the required data, we 

estimate that eight States will request 

that CMS approve an alternative process 

for submitting data under 

§ 435.927(c)(2) during the compliance 

period of April 1, 2023, through June 30, 

2024. We estimate that for each of the 

eight States that request and receive 

approval to use an alternative process to 

submit required data, it will take a 

Project Management Specialist 8 hours 

at $97.70/hour and a Database 

Administrator 15 hours at $98.58/hour 

to develop an alternative process, reach 

agreement with CMS, and submit the 

required data, for an aggregate of 184 

hours (8 States × 23 hours) and $18,082 

[(($97.70 × 8 hours) + ($98.58 × 15 

hours)) × 8 States]. Taking into account 

the 50 percent Federal contribution to 

Medicaid program administration, the 

estimated State share would be $9,041. 

2. ICRs Related to Corrective Action 

Plans (CAPs) (§ 430.49(b)) 

The following changes will be 

submitted to OMB for approval under 

control number 0938–TBD (CMS– 

10875). At this time the control number 

has yet to be determined, but it will be 

assigned by OMB upon their approval of 

this IFC’s collection of information 

request. The public can monitor OMB’s 

issuance of the control number (and the 

control number’s expiration date) at 

reginfo.gov. 

This rule authorizes CMS to require 

States to submit a CAP to CMS if the 

State is out of compliance with the 

reporting requirements in section 

1902(tt)(1) of the Act or Federal 

eligibility redetermination requirements 

(including any alternative processes and 

procedures approved by CMS, such as 

renewal strategies authorized under 

section 1902(e)(14)(A))) of the Act 

during the compliance period between 

April 1, 2023 and June 30, 2024. 

Based on CMS’ ongoing work with 

States to unwind from the continuous 

enrollment condition, we estimate that 

3 States will be out of compliance with 

data reporting requirements and 5 States 

will be out of compliance with Federal 

redetermination requirements during 

the compliance period of April 1, 2023, 

to June 30, 2024. Some States may be 

out of compliance with both sets of 

requirements and required to submit 

just one CAP addressing both issues, but 

for purposes of estimating State burden, 

we will assume they are mutually 

exclusive sets of States for a total of 8 

States. We will also assume for purposes 

of estimating State burden that CMS 

will require a CAP from all of the 8 

noncompliant States (and will not 

exercise its discretion not to require a 

CAP from any of them). We recognize 

that, if our assumptions are incorrect, 

the aggregate burden may be less or 

more than estimated here. 

We estimate that for each of the 8 

States required to submit a CAP to CMS, 

it will take a Management Analyst 20 

hours at $100.64/hour and a General 

and Operations Manager 8 hours at 

$118.14/hour to write, clear, and submit 

a CAP that includes the criteria at 

§ 430.49(b)(3) for an aggregate of 224 

hours (8 States × 28 hours) and $23,663 

[(($100.64 × 20 hours) + ($118.14 × 8 

hours)) × 8 States]. Taking into account 

the 50 percent Federal contribution to 

Medicaid program administration, the 

estimated State share would be $11,832. 


lotter on DSK11XQN23PROD with RULES1
84730 Federal Register / Vol. 88, No. 233 / Wednesday, December 6, 2023 / Rules and Regulations 

TABLE 3—SUMMARY OF PROPOSED BURDEN ESTIMATES

Regulation 

section(s) 

OMB 

control No. 

(CMS ID No.) 

Number of 

respondents 

Number of 

responses 

per 

respondent 

Hourly 

labor 

cost 

($/hr) 

Time 

per 

response 

(hours) 

Total 

time 

(hours) 

Labor 

cost 

($) 

Total 

state 

share 

($) 

Total 

beneficiary 

burden 

(hours) 

Total 

beneficiary 

cost ($) 

Total 

nonlabor 

cost 

($) 

Frequency 

§ 435.927 ...... 0938–TBD 

(CMS–10875).

8 1 varies 23 184 18,082 9,041 n/a n/a n/a One-Time. 

§ 430.49(b) ... 0938–TBD 

(CMS–10875).

8 1 varies 28 224 23,663 11,832 n/a n/a n/a One-Time. 

Total ...... 0938–TBD 

(CMS–10875).

.................... .................. ............ .............. 408 41,745 20,873 n/a n/a n/a One-Time. 

C. Submission of PRA-Related 

Comments 

We have submitted a copy of this rule 

to OMB for its approval of the rule’s 

information collection requirements. 

The requirements are not effective until 

they have been approved by OMB. 

To obtain copies of the supporting 

statement and any related forms for the 

collections previously discussed in this 

rule, please visit the CMS website at 

https://www.cms.hhs.gov/Paperwork

ReductionActof1995, or call the Reports 

Clearance Office at (410) 786–1326. 

If you comment on these information 

collection requirements, please submit 

your comments electronically as 

specified in the DATES and ADDRESSES

sections of this interim final rule. 

V. Response to Comments 

Because of the large number of public 

comments normally received on Federal 

Register documents, the Department is 

not able to acknowledge or respond to 

them individually. We will consider all 

comments we receive by the date and 

time specified in the DATES section of 

this preamble, and, if we proceed with 

a subsequent document, we will 

respond to the comments in the 

preamble to that document. 

VI. Regulatory Impact Analysis 

A. Statement of Need 

We have learned through working 

with States as they unwind from the 

continuous enrollment condition under 

the FFCRA and return to normal 

operations that States face challenges in 

processing an unprecedented volume of 

redeterminations. Through routine 

monitoring and technical assistance, 

CMS is working with States to address 

and mitigate policy and operational 

barriers to meeting all Federal eligibility 

and enrollment requirements. Congress 

has given CMS new tools to hold States 

accountable when States fail to meet 

Federal redetermination requirements 

during the period from April 1, 2023, to 

June 30, 2024. 

In this rulemaking, we implement 

State reporting requirements and CMS’ 

enforcement authorities under section 

1902(tt) of the Act. We interpret and 

implement statutory language and 

specify parameters related to when 

States will be required to submit certain 

data. We also specify how CMS 

interprets and will calculate the FMAP 

reduction required under section 

1902(tt)(2)(A) of the Act for a State’s 

failure to comply with the reporting 

requirements in section 1902(tt)(1) of 

the Act for a quarter during the period 

from July 1, 2023, through June 30, 

2024. We also specify parameters 

related to when States that are 

noncompliant with reporting 

requirements in section 1902(tt)(1) of 

the Act or with Federal eligibility 

redetermination requirements must 

submit a CAP, and when they will be 

required to suspend some or all 

disenrollments of eligibility for 

procedural reasons, and/or pay CMPs. 

We also specify the conditions under 

which CMS would lift requirements to 

suspend procedural disenrollments and 

CMPs as States come into compliance 

with Federal redetermination and 

reporting requirements via submission 

or implementation of their approved 

CAPs. Together, the changes in this rule 

will give States clear guidance about 

how to comply with the new reporting 

requirements and how CMS will take 

enforcement action for failure to comply 

with these new reporting requirements 

and Federal eligibility redetermination 

requirements. The new enforcement 

tools in section 1902(tt) of the Act are 

expected to help CMS prevent loss of 

coverage for eligible beneficiaries. 

B. Overall Impact 

We have examined the impacts of this 

rule as required by E.O. 12866 on 

Regulatory Planning and Review 

(September 30, 1993), E.O. 13563 on 

Improving Regulation and Regulatory 

Review (January 18, 2011), Executive 

Order 14094 entitled ‘‘Modernizing 

Regulatory Review’’ (April 6, 2023), the 

Regulatory Flexibility Act (RFA) 

(September 19, 1980, Pub. L. 96354), 

section 1102(b) of the Act, section 202 

of the Unfunded Mandates Reform Act 

(UMRA) of 1995 (March 22, 1995; Pub. 

L. 104–4), E.O. 13132 on Federalism 

(August 4, 1999), and the Congressional 

Review Act (CRA) (5 U.S.C. 804(2)). 

OMB has determined that this rule is 

non-major under 5 U.S. Code § 801, and 

therefore, is not subject to the CRA and 

has also determined that this rule is not 

significant under 3(f)(1) of E.O. 12866. 

We have estimated the potential 

impacts of this rule on Medicaid 

enrollment and expenditures. Overall, 

the rule’s impact is expected to be 

limited. States are already aware of 

Federal redetermination requirements 

and, as noted in sections I.C. and I.D of 

this rule, CMS provides advice and 

technical assistance to help States 

comply with these requirements and the 

new reporting requirements in section 

1902(tt)(1) of the Act. When CMS 

becomes aware of a potential violation 

of Federal requirements, we first 

attempt to work collaboratively with the 

State to understand the nature and 

scope of the problem and to identify 

appropriate alternative processes and 

procedures that the State can adopt to 

avoid or minimize beneficiary harm 

until the State can fix the problem and 

come into full compliance with Federal 

requirements, consistent with our 

authority to enforce compliance with 

section 1902 of the Act under section 

1904 of the Act and § 430.35. In 

addition, the new enforcement 

authorities in this rule are only 

applicable to State activities that occur 

during a time-limited period, generally 

from April 1, 2023, to June 30, 2024. 

This rule implements new 

enforcement tools that CMS can use to 

address violations of Federal Medicaid 

redetermination or reporting 

requirements that occur during a period 

that generally aligns with States’ 

unwinding periods. Beginning with the 

analysis of redetermination 

requirements, we start with an 

assumption that in most cases 

redeterminations would be accurate and 

follow required processes and, thus, that 

the new enforcement tools implemented 


lotter on DSK11XQN23PROD with RULES1
Federal Register / Vol. 88, No. 233 / Wednesday, December 6, 2023 / Rules and Regulations 84731 

31https://www.whitehouse.gov/wp-content/ 

uploads/2023/07/msr_fy2024.pdf. 

through this rule will not be widely 

needed. Even though the Federal 

government and States already have 

processes in place to ensure 

redeterminations are done correctly and 

States are already required to do so, the 

new enforcement authorities will give 

CMS additional tools to enforce 

compliance with these requirements. As 

noted in section I.D. and above, CMS 

attempts to work collaboratively with a 

State first to understand the nature and 

scope of any potential violation of 

Federal requirements and to identify 

appropriate alternative processes and 

procedures that the State can adopt to 

avoid or minimize beneficiary harm 

until the State can fix the problem and 

come into full compliance with Federal 

requirements. However, 

notwithstanding those efforts, it is 

possible that a few States might still be 

noncompliant, thus making it necessary 

for CMS to use the enforcement tools 

implemented in this rule. 

It is possible that in the course of 

States coming into compliance with the 

requirements enforceable through 

section 1902(tt) of the Act absent this 

rule, some eligible individuals would 

remain enrolled who might have 

otherwise been disenrolled for 

procedural reasons due to a State’s 

failure to comply with redetermination 

requirements. The impacts estimated in 

this section depend on the effectiveness 

of this rule at ensuring that eligibility 

redeterminations are done correctly, as 

well as the assumptions about how 

many unauthorized procedural 

disenrollments would have occurred 

absent this rule. 

In the Mid-Session Review of the 

President’s FY 2024 Budget,31 CMS 

projected that Medicaid enrollment 

would decline by about 18 million 

enrollees due to the unwinding of the 

Medicaid continuous enrollment 

condition through the end of fiscal year 

2024 (or about 19 percent as measured 

from the peak of Medicaid enrollment in 

March-April 2023). This does not 

include individuals who newly enroll 

over this period. 

To develop the estimates, we started 

with the following assumptions. First, 

we assumed that a maximum of five 

States would be out of compliance with 

the Federal redetermination 

requirements under this rule and be 

subject to CAPs and suspensions of 

procedural disenrollments and/or CMPs 

if they did not submit or implement an 

approvable CAP. We assumed that all 

States would take the appropriate steps 

to submit or implement CAPs and, thus, 

that CMS would require no suspensions 

of procedural disenrollments and 

impose no CMPs. Second, we assumed 

that States out of compliance with 

Federal redetermination requirements 

would have about 5 percent more 

individuals found ineligible and that 

those individuals would still be eligible 

and would have remained enrolled if 

redeterminations were done accurately. 

Third, we assumed that about 40 

percent of enrollees who would have 

been disenrolled would have ultimately 

re-enrolled within 12 months. We 

assumed that this rule would bring all 

States into compliance and that 

individuals wrongly disenrolled would 

be re-enrolled; in future cases, this rule 

would also prevent those incorrect 

disenrollments from occurring. We 

assume that any such effects would start 

by early 2024. 

We estimate that the rule would 

increase Medicaid enrollment by about 

7,000 individuals in fiscal year 2024 

and 13,000 individuals in fiscal year 

2025 (average annual enrollment). We 

estimate that total Medicaid spending 

due to increased enrollment would be 

about $50 million higher in fiscal year 

2024 ($36 million Federal) and about 

$93 million higher annually in fiscal 

year 2025 and subsequent years ($66 

million Federal). 

Actual impacts could be greater than 

or less than estimated here. Future 

spending and enrollment could grow 

faster or slower than projected. More or 

fewer States could be out of compliance 

than we have assumed, and the number 

of unauthorized procedural 

disenrollments could also be higher or 

lower than we have assumed. This rule 

could also be more or less effective than 

we expect. Moreover, if one or more 

States did not comply with these 

requirements, those States could be 

assessed CMPs that would result in a 

transfer from States to CMS and could 

lead to additional actions. 

This rule also implements a statutory 

FMAP reduction for noncompliance 

with reporting requirements under 

section 1902(tt)(1) of the Act. States out 

of compliance with these reporting 

requirements between July 1, 2023, and 

June 30, 2024, would be assessed a 

reduction in FMAP of 0.25 percentage 

points for each quarter they are out of 

compliance, and this would increase by 

0.25 percentage points for each 

additional quarter they are out of 

compliance. States that fail to comply 

with reporting requirements may also be 

required to submit a CAP, and if the 

reporting violations impeded CMS 

oversight of procedural disenrollments, 

States that fail to submit or implement 

an approvable CAP will be required to 

suspend procedural disenrollments and 

will also be subject to CMPs. If the 

reporting violation did not impede 

CMS’ oversight of procedural 

disenrollments, CMS will delay 

suspension of procedural 

disenrollments for 1 month but will still 

impose CMPs (except in extraordinary 

circumstances, as discussed in section 

II.E. of this rule). We assume that at 

most an additional three States would 

be out of compliance with reporting 

requirements for one quarter each. 

Although States that are noncompliant 

are at risk of additional enforcement 

action, we estimate that most States will 

correct violations without a CAP or, if 

a CAP is imposed, will implement the 

CAP to address any violations and not 

be subject to additional enforcement 

actions. We estimate that the impact of 

the States that are noncompliant with 

reporting requirements would result in 

a FMAP reduction of $30 million, which 

would be a transfer from those States to 

the Federal government. 

In total and consistent with the 

assumptions noted above, the estimated 

net effects of this rule would be Federal 

costs of about $6 million in fiscal year 

2024 ($36 million in costs for additional 

enrollment, and $30 million in 

collections from States assessed an 

FMAP reduction) and $66 million in 

fiscal year 2025. For States, the 

estimated effects are $44 million in 

costs in fiscal year 2024 ($14 million in 

costs for additional enrollment, and $30 

million in payments related to the 

FMAP reduction) and $27 million in 

fiscal year 2025. 

The actual impact could be more or 

less than we have estimated. The key 

uncertainties are the number of States 

out of compliance, which States those 

would be (as Federal spending varies 

significantly across States, depending 

on the Medicaid population and 

spending levels and the FMAP rates for 

each State), and the number of quarters 

those States are out of compliance. We 

anticipate that States would quickly 

remedy any issues that would result in 

an FMAP reduction, and thus would be 

unlikely to be assessed an FMAP 

reduction in more than one quarter. 

Executive Orders 12866 and 13563 

direct agencies to assess all costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). Executive Order 14094 amends 

section 3(f) of Executive Order 12866. 

The amended section 3(f) of Executive 

Order 12866 defines a ‘‘significant 


lotter on DSK11XQN23PROD with RULES1
84732 Federal Register / Vol. 88, No. 233 / Wednesday, December 6, 2023 / Rules and Regulations 

regulatory action’’ as an action that is 

likely to result in a rule: (1) having an 

annual effect on the economy of $200 

million or more in any 1 year (adjusted 

every 3 years by the Administrator of 

the Office of Information and Regulatory 

Affairs (OIRA) for changes in gross 

domestic product), or adversely affect in 

a material way the economy, a sector of 

the economy, productivity, competition, 

jobs, the environment, public health or 

safety, or State, local, territorial, or tribal 

governments or communities; (2) 

creating a serious inconsistency or 

otherwise interfering with an action 

taken or planned by another agency; (3) 

materially altering the budgetary 

impacts of entitlement grants, user fees, 

or loan programs or the rights and 

obligations of recipients thereof; or (4) 

raise legal or policy issues for which 

centralized review would meaningfully 

further the President’s priorities or the 

principles set forth in this Executive 

order, as specifically authorized in a 

timely manner by the Administrator of 

OIRA in each case. 

A regulatory impact analysis (RIA) 

must be prepared for rules that are 

significant under section 3(f)(1) of 

Executive Order 12866 as amended by 

Executive Order 14094 ($200 million or 

more in any 1 year). Based on our 

analysis, OIRA has designated this rule 

as not significant under section 3(f)(1). 

In reviewing the economic effect of this 

rule, we have assumed that States will 

generally meet reporting requirements 

and requirements for Medicaid 

eligibility redeterminations and 

continue to meet the conditions for the 

temporary FFCRA FMAP increase, and 

thus will not be subject to FMAP 

reductions, suspensions of procedural 

disenrollments, CMPs, or loss of Federal 

matching funds that would rise to the 

level of $200 million or more in any one 

year. While we assume that only a 

handful of States would have failed to 

comply absent this interim final rule, 

even in those hypothetical cases, we 

assume States will come into 

compliance promptly and avoid the 

enforcement actions described in this 

interim final rule, further minimizing 

the rule’s economic impact. For 

example, we assumed States will use 

existing contracts to modify systems to 

ensure data are reported to CMS timely. 

The RFA requires agencies to analyze 

options for regulatory relief of small 

businesses. For purposes of the RFA, 

small entities include small businesses, 

nonprofit organizations, and small 

governmental jurisdictions. Most 

hospitals and most other providers and 

suppliers are small entities, either by 

nonprofit status or by having revenues 

of less than $9.0 million to $47.0 

million in any one year. Individuals and 

States are not included in the definition 

of a small entity. The good cause 

exception of the APA applicable to this 

rule allows CMS to waive the regulatory 

impact analysis typically required under 

the RFA. 

In addition, section 1102(b) of the Act 

requires CMS to prepare an RIA if a rule 

may have a significant impact on the 

operations of a substantial number of 

small rural hospitals. This analysis must 

conform to the provisions of section 604 

of the RFA. For purposes of section 

1102(b) of the Act, we define a small 

rural hospital as a hospital that is 

located outside a Metropolitan 

Statistical Area and has fewer than 100 

beds. This rule applies to State 

Medicaid and CHIP agencies and will 

not add requirements for rural hospitals 

or other small providers. Therefore, we 

are not preparing an analysis for section 

1102(b) of the Act because we have 

determined, and the Secretary certifies, 

that this rule will not have a significant 

impact on the operations of a substantial 

number of small rural hospitals. 

Section 202 of the UMRA also 

requires that agencies assess anticipated 

costs and benefits before issuing any 

rule whose mandates require spending 

in any one year of $100 million in 1995 

dollars, updated annually for inflation. 

In 2023, that is approximately $177 

million. We believe that this rule will 

not mandate spending by State, local, or 

tribal governments nor by private sector 

entities over this level. 

C. Administrative Burden 

We do not anticipate this rule will 

significantly impact administrative 

spending by the Federal Government. 

D. Alternatives Considered 

In developing this final rule, the 

following alternatives were considered: 

1. Not Finalizing the Rule 

We considered not finalizing this rule 

and considering the provisions of 

section 1902(tt) of the Act to be selfimplementing. However, we believe the 

authority to require State reporting 

under section 1902(tt)(1) of the Act, to 

impose CAPs on States that fail to meet 

Federal redetermination requirements or 

the reporting requirements under 

section 1902(tt)(1) of the Act, and to 

suspend procedural disenrollments and 

impose CMPs on States that fail to 

submit or implement a required CAP, 

required regulation in order to enable 

CMS to exercise its full statutory 

enforcement authority fairly and 

uniformly. For example, we believe the 

mitigating circumstances outlined in 

this rule, which memorialize when and 

how CMS will exercise its discretion to 

take enforcement action under section 

1902(tt)(2)(B) of the Act, necessitated 

regulation. 

2. Implementing Section 1902(tt) of the 

Act Through Subregulatory Guidance 

We considered not promulgating a 

regulation but instead implementing 

section 1902(tt) of the Act through 

subregulatory guidance. However, CMS 

believes that the policy interpretations 

in this rule are different enough from 

the statutory language to necessitate 

regulation. For example, while the 

statute gives CMS discretion regarding 

whether to require a State to submit a 

CAP and regarding whether to require 

suspension of procedural 

disenrollments or impose CMPs if a 

State fails to submit or implement that 

CAP, the rule outlines in detail how 

CMS will exercise this discretion. 

3. Promulgating a Proposed Rule 

We considered promulgating a 

proposed rule rather than an IFC to 

implement these same provisions. 

However, as outlined in section III. of 

this rule, we believe notice-andcomment procedures and a delay in the 

effective date of this rule are 

impracticable and/or contrary to the 

public interest. 

E. Limitations of the Analysis 

As described previously, we have 

assumed that all but three States would 

comply with the reporting requirements, 

and all but five States would comply 

with Federal redetermination 

requirements referenced in this interim 

final rule and be subject to the CAP 

requirements at 430.49(b). It is possible 

that one or more of these States would 

fail to comply with the CAP 

requirements, and thus be ineligible for 

the temporary FFCRA FMAP increase, 

or be subject to the other penalties 

discussed in this rule, including 

suspension of procedural 

disenrollments and CMPs, and thus that 

the economic impact of the rule would 

be greater. In those cases, we would also 

assume more individuals would be 

disenrolled than would occur if the 

State complied with these requirements. 

We have not attempted to quantify the 

non-administrative program impact 

(that is, changes in enrollment and/or 

spending on benefits, not the costs 

associated with training/hiring workers, 

programming systems, or printing 

notices, for example) of a State failing to 

comply with the CAP requirements in 

the interim final rule. 

In accordance with the provisions of 

Executive Order 12866, this regulation 


lotter on DSK11XQN23PROD with RULES1
Federal Register / Vol. 88, No. 233 / Wednesday, December 6, 2023 / Rules and Regulations 84733 

was reviewed by the Office of 

Management and Budget. 

Chiquita Brooks-LaSure, 

Administrator of the Centers for 

Medicare & Medicaid Services, 

approved this document on September 

27, 2023. 

List of Subjects 

42 CFR Part 430 

Administrative practice and 

procedure, Grant programs—health, 

Medicaid, Reporting and recordkeeping 

requirements. 

42 CFR Part 435 

Aid to Families with Dependent 

Children, Grant programs—health, 

Medicaid, Reporting and recordkeeping 

requirements, Supplemental Security 

Income (SSI), Wages. 

45 CFR Part 16 

Procedures of the Departmental 

Grants Appeals Board. 

For the reasons set forth in the 

preamble, the Centers for Medicare & 

Medicaid Services and the Department 

of Health and Human Services amend 

42 CFR chapter IV and 45 CFR subtitle 

A, subchapter A, as set forth below: 

Title 42 

PART 430—GRANTS TO STATES FOR 

MEDICAL ASSISTANCE PROGRAMS 

■ 1. The authority citation for part 430 

continues to read as follows— 

Authority: Sec. 1102 of the Social Security 

Act, (42 U.S.C. 1302). 

■ 2. Section 430.3 is amended by 

revising the introductory text and 

adding paragraph (d) to read as follows: 

§ 430.3 Appeals under Medicaid. 

Four distinct types of disputes may 

arise under Medicaid. 

* * * * * 

(d) Imposition of suspensions of 

procedural disenrollments and civil 

money penalties under section 430.49 of 

this part. Disputes that pertain to CMS’ 

imposition of suspensions of procedural 

disenrollments and civil money 

penalties under § 430.49(c) of this part 

are heard by the Board in accordance 

with procedures set forth in 45 CFR part 

16. 

■ 3. Section 430.5 is amended by adding 

definitions for ‘‘Federal redetermination 

requirements’’ and ‘‘Procedural 

disenrollment’’ in alphabetical order to 

read as follows: 

§ 430.5 Definitions. 

* * * * * 

Federal redetermination requirements 

means, for the purposes of § 430.49, 

Federal requirements applicable to 

eligibility redeterminations outlined in 

42 CFR 435.916, including renewal 

strategies authorized under section 

1902(e)(14)(A) of the Social Security Act 

or other alternative processes and 

procedures approved by CMS under 

section 1902(e)(14)(A) of the Act or 

section 6008(f)(2)(A) of the Families 

First Coronavirus Response Act. 

Procedural disenrollment means, for 

the purposes of § 430.49 and 45 CFR 

part 16, a termination of a beneficiary’s 

Medicaid eligibility after advance notice 

under subpart E of part 431 for reasons 

that are unrelated to a State’s 

determination of whether the individual 

meets eligibility criteria to qualify for 

coverage, including for failure to return 

a renewal form or documentation 

needed by the State to make a 

determination of eligibility. 

* * * * * 

■ 4. Section 430.49 is added to subpart 

C to read as follows: 

§ 430.49 Corrective action plans, 

suspensions of procedural disenrollments, 

and civil money penalties. 

(a) Statutory basis. This section 

interprets and implements section 

1902(tt)(2)(B) of the Social Security Act. 

(b) Corrective action plans—(1) Basis 

for corrective action. After consideration 

of any mitigating circumstances in 

accordance with paragraph (d) of this 

section and notwithstanding whether an 

FMAP reduction has been imposed 

under § 435.928 of this subchapter, CMS 

will determine whether to require the 

State to submit a corrective action plan 

if CMS finds that the State is not in 

compliance during the period beginning 

on April 1, 2023, through June 30, 2024, 

with either of the following 

requirements: 

(i) The requirement to submit data 

required under section 1902(tt)(1) of the 

Act in accordance with § 435.927 of this 

subchapter; or 

(ii) Federal redetermination 

requirements described at § 430.5. 

(2) Notice of need for corrective action 

plan. If, after considering mitigating 

circumstances as described in paragraph 

(d) of this section, the Administrator 

decides to require the State to submit 

and implement a corrective action plan 

for noncompliance described in 

paragraph (b)(1) of this section or to 

revise or resubmit such a plan, the 

Administrator will provide the State 

with a written notice directing the State 

to submit a corrective action plan to 

correct the identified areas of 

noncompliance. Such notice will— 

(i) Explain the violation of Federal 

redetermination or reporting 

requirements that CMS has identified 

and the basis for CMS’ finding; 

(ii) Inform the State of the 

requirement to submit and implement a 

corrective action plan: 

(iii) Include instructions on the 

method and deadline by which the State 

must submit a corrective action plan to 

CMS; and 

(iv) Explain the enforcement actions 

that CMS may pursue if the State fails 

to submit or implement an approved 

corrective action plan, including if CMS 

disapproves the State’s submitted CAP 

or if the State fails to meet the 

requirements set forth in the approved 

CAP, in accordance with this section. 

(3) Content of corrective action plan. 

A corrective action plan must describe 

in detail— 

(i) The actions the State will take 

immediately, if needed to prevent 

further harm or risk of harm to 

beneficiaries while it implements the 

corrective action plan, including to 

prevent increased burden for 

beneficiaries in completing the renewal 

process, loss of coverage at renewal for 

individuals who continue to meet the 

substantive eligibility criteria and 

whose eligibility should otherwise be 

retained but for failure to meet a 

procedural requirement, and delays in 

access to coverage or care; 

(ii) The steps the State will take to 

ensure compliance with Federal 

requirements, including but not limited 

to new policies, procedures, operational 

processes or systems changes it will 

implement; 

(iii) Key milestones and a detailed 

timeline for achieving compliance; and 

(iv) A plan for communicating the 

steps the State will take to prevent 

actual harm or risk of harm to 

beneficiaries and to ensure compliance 

with Federal requirements per 

paragraphs (b)(3)(i) and (ii) of this 

section to State staff, including staff of 

non-Medicaid agencies or entities to 

which the agency has delegated 

authority to conduct redeterminations of 

eligibility in accordance with 

§ 431.10(c)(1)(i) of this subchapter; 

CMS; and beneficiaries, as applicable. 

(4) Timeframes for submission, 

approval, and implementation of 

corrective action plan—(i) Submission. 

A State that receives a notice described 

in paragraph (b)(2) of this section must 

submit a corrective action plan, 

including the elements in paragraph 

(b)(3) of this section, not later than 14 

calendar days from the date of the 

notice of noncompliance. 

(ii) Approval. CMS must approve or 

disapprove a corrective action plan 

submitted by the State within 21 

calendar days of the date it is submitted. 


lotter on DSK11XQN23PROD with RULES1
84734 Federal Register / Vol. 88, No. 233 / Wednesday, December 6, 2023 / Rules and Regulations 

If CMS does not approve or disapprove 

the corrective action plan within 21 

calendar days of submission, the 

corrective action plan will be deemed 

approved. 

(iii) Implementation. A State must 

begin implementation of the corrective 

action plan not later than 14 calendar 

days after the date that either the State 

receives CMS approval, or the corrective 

action plan is deemed approved. 

(5) Approval or disapproval of 

corrective action plan. A corrective 

action plan will be approved if CMS 

determines that the plan– 

(i) Meets the requirements at 

paragraph (b)(3) of this section; 

(ii) Promptly eliminates or minimizes 

any harm or risk of harm to 

beneficiaries, including increased 

burden for beneficiaries in completing 

the renewal process, loss of coverage at 

renewal for individuals who continue to 

meet the substantive eligibility criteria 

and whose eligibility should otherwise 

be retained but for failure to meet a 

procedural requirement, and delays in 

access to coverage or care due to the 

noncompliance to be addressed by the 

plan; and 

(iii) Results in the State achieving 

compliance in a reasonable time, taking 

into account systems challenges and 

circumstances faced by the agencies 

involved. 

(c) Suspensions of procedural 

disenrollments and civil money 

penalties. (1) After considering any 

applicable mitigating circumstances in 

accordance with paragraph (d) of this 

section and notwithstanding whether 

the State is subject to an FMAP 

reduction under § 435.928 of this 

subchapter, CMS may take one or both 

of the following actions if the State fails 

to submit or implement an approved 

corrective action plan, including if CMS 

disapproves the State’s submitted 

corrective action plan due to the State’s 

failure to include required elements in 

accordance with the requirements 

described in paragraph (b) of this 

section, or if the State fails to meet the 

requirements set forth in the approved 

corrective action plan: 

(i) Require the State to suspend some 

or all procedural disenrollments, in 

accordance with paragraph (c)(3)(i) of 

this section; and 

(ii) Impose civil money penalties in 

accordance with paragraph (c)(3)(ii) of 

this section. 

(2) Notice. (i) Prior to requiring the 

State to suspend procedural 

disenrollments of Medicaid eligibility or 

imposing civil money penalties, CMS 

will issue a notice to the State. Such 

notice will include— 

(A) A description of the enforcement 

action(s) CMS is taking and the basis for 

such action(s); 

(B) Whether CMS is requiring the 

State to suspend some or all procedural 

disenrollments and, in the case of a 

partial suspension, the affected 

populations; 

(C) The date on which the State must 

begin suspending procedural 

disenrollments, if applicable; 

(D) The daily amount owed for any 

civil money penalties imposed, the date 

the penalties will begin to be charged, 

the timeline for payment (including 

information on how the timeline for 

payment would be affected by an 

appeal), and instructions on how to 

submit payment; 

(E) The steps the State must take to 

cure its noncompliance and for CMS to 

lift the enforcement action(s); and 

(F) Information on the State’s appeal 

rights as described in paragraph (f) of 

this section, including the deadline to 

submit an appeal request, and the effect 

of requesting an appeal on the 

applicability of any enforcement actions 

pending the decision in such appeal. 

The notice must also provide that the 

decision outlined in the notice is final 

unless it is timely appealed as described 

in paragraph (f) of this section. 

(ii) CMS may issue additional notices 

requiring a State to take additional 

actions (including paying increased 

civil money penalties or implementing 

or broadening the scope of a required 

suspension of procedural 

disenrollments) if CMS identifies 

additional violations of corrective action 

plan provisions. Such notices will meet 

the requirements outlined in paragraph 

(c)(2)(i) of this section. 

(3) Scope of actions—(i) Suspensions 

of procedural disenrollments. (A) If the 

noncompliance determined by CMS 

under paragraph (b)(1) of this section 

impacts a substantial number of 

(meaning all or nearly all) individuals 

who are or should have been found 

eligible for Medicaid, CMS will require 

the State to suspend all procedural 

disenrollments. 

(B) If the impact of the 

noncompliance is limited (for example, 

to a specific population or geographic 

area), CMS may limit the suspension of 

procedural disenrollments to the 

impacted population(s). After requiring 

a limited suspension of procedural 

disenrollments, CMS may later opt to 

require the State to suspend all 

procedural disenrollments if CMS 

subsequently determines that the impact 

of the noncompliance is greater than 

was initially determined, or if the State 

fails to comply with the initial 

requirement to suspend some 

procedural disenrollments in 

accordance with the notice issued under 

paragraph (c)(2) of this section. In these 

circumstances, CMS will issue a 

subsequent notice under paragraph 

(c)(2). 

(ii) Civil money penalties. CMS may 

require the State to pay a civil money 

penalty of not more than $100,000, as 

adjusted annually under 45 CFR part 

102, for each day that the State has not 

submitted or implemented an approved 

corrective action plan in accordance 

with the requirements described in 

paragraph (b) of this section or has 

failed to meet the requirements of the 

approved plan, until the penalty is lifted 

due to the State meeting the conditions 

described in paragraph (e) of this 

section. 

(A) Civil money penalties will start 

accruing five (5) calendar days after the 

date of the initial notice described in 

paragraph (c)(2) of this section and 

become payable 60 calendar days after 

the date of the notice, if not timely 

appealed, or 60 calendar days after 

issuance of a final determination at the 

conclusion of any appeal pursuant to 

paragraph (f) of this section. 

(B) The amount of any applicable civil 

money penalties for failure to submit or 

implement a corrective action plan, 

including if CMS disapproves the 

State’s submitted corrective action plan 

or if the State fails to meet the 

requirements set forth in the approved 

corrective action plan, will be 

determined according to the following 

formula, after the date specified in 

paragraph (c)(3)(ii)(A) of this section: 

Days 1–30 of noncompliance: $25,000/ 

day; Days 31–60 of noncompliance: 

$50,000/day; and Days 61 or more of 

noncompliance until lifted in 

accordance with paragraph (e) of this 

section: $100,000/day. Each of these 

amounts is adjusted annually under 45 

CFR part 102. 

(C) Consistent with paragraph 

(c)(2)(ii) of this section, if CMS 

identifies additional violations of 

corrective action plan provisions, CMS 

may issue additional notices to increase 

civil money penalties more quickly than 

provided for by the formula in 

paragraph (c)(3)(ii)(B) of this section. 

(4) Noncompliance with requirements 

to suspend procedural disenrollments or 

pay civil money penalties. If the State 

fails to suspend procedural 

disenrollments as required pursuant to 

a notice described in paragraph (c)(2) of 

this section, or to pay civil money 

penalties as specified in that notice, or 

both, CMS may issue an additional 

notice pursuant to paragraph (c)(2) of 

this section to increase the civil money 

penalties to the maximum allowable 


lotter on DSK11XQN23PROD with RULES1
Federal Register / Vol. 88, No. 233 / Wednesday, December 6, 2023 / Rules and Regulations 84735 

daily amount, if not already reached, or 

may pursue additional enforcement 

action under section 1904 of the Act and 

§ 430.35 of this subpart, including 

withholding some or all Federal 

financial participation. 

(d) Mitigating circumstances. CMS 

will consider the following mitigating 

circumstances when deciding whether 

to take the following enforcement 

actions: 

(1) Requirement to submit corrective 

action plan for violation of 

redetermination requirements. In the 

case of noncompliance relating to a 

violation of Federal redetermination 

requirements, CMS may delay requiring, 

or determine not to require, a State to 

submit a corrective action plan under 

paragraph (b) of this section if— 

(i) The noncompliance caused neither 

actual harm nor a substantial risk of 

harm to beneficiaries, including 

increased burden for beneficiaries in 

completing the renewal process, loss of 

coverage at renewal for individuals who 

continue to meet the substantive 

eligibility criteria and whose eligibility 

should otherwise be retained but for 

failure to meet a procedural 

requirement, and delays in access to 

coverage or care to beneficiaries; or 

(ii) CMS determines that there is an 

emergency or other extraordinary 

circumstances preventing the State’s 

compliance. 

(2) Requirement to submit corrective 

action plan for violation of reporting 

requirements. In the case of 

noncompliance relating to a violation of 

the reporting requirements under 

§ 435.927 of this subchapter, CMS may 

delay requiring, or determine not to 

require, a State to submit a corrective 

action plan under paragraph (b) of this 

section if— 

(i) CMS has determined that the State 

implementing a corrective action plan is 

not necessary to ensure that the 

noncompliance is remedied; or 

(ii) CMS determines that there is an 

emergency or other extraordinary 

circumstances preventing the State’s 

compliance. 

(3) Suspensions of procedural 

disenrollments and imposition of civil 

money penalties. (i) In the case of a 

State that has failed to submit or 

implement an approved corrective 

action plan relating to a violation of 

either the reporting requirements under 

§ 435.927 of this subchapter or Federal 

redetermination requirements, CMS 

may delay or forgo imposing civil 

money penalties if CMS determines that 

the State faces an emergency or other 

extraordinary circumstances that— 

(A) Occurred after the violation 

resulting in CMS’ requirement of a CAP 

for noncompliance with Federal 

redetermination requirements or 

reporting requirements under § 435.927; 

and 

(B) Has significantly impeded the 

State’s ability to submit or implement a 

corrective action plan. 

(ii) In the case of a State’s failure to 

submit or implement a corrective action 

plan relating to a violation of the 

reporting requirements under § 435.927 

of this subchapter in which the 

underlying reporting violation does not 

impede CMS’ oversight of the State’s 

procedural disenrollments, CMS will: 

(A) Delay suspension of procedural 

disenrollments for 1 month; and 

(B) Impose civil money penalties, 

except in cases where there are also 

extraordinary circumstances as 

described in paragraph (d)(3)(i) of this 

section. 

(e) Lifting of enforcement actions. (1) 

In cases where CMS had sent a State a 

notice under paragraph (c)(2) of this 

section for failure to submit or 

implement an approved corrective 

action plan— 

(i) The State will be required to 

continue any suspension of procedural 

disenrollments required pursuant to 

such notice, and any civil money 

penalties imposed in accordance with 

the terms of such notice will continue 

to be charged, until— 

(A) For a State that failed to submit a 

corrective action plan, the State submits 

a corrective action plan that CMS 

determines is approvable consistent 

with paragraph (b)(5) of this section. 

(B) For a State that failed to 

implement an approved corrective 

action plan, the State has implemented 

or resumed implementation of such 

plan. 

(ii) CMS will continue the accrual of 

civil money penalties from the date 

specified in the original notice provided 

to the State under paragraph (c)(2) of 

this section until CMS determines 

whether the plan is approvable. If CMS 

determines that the plan is approvable, 

CMS will retroactively end the accrual 

of the civil money penalties on the day 

the CAP was submitted and cease 

charging civil money penalties 

prospectively. If CMS determines that 

the plan is not approvable, CMS will 

continue charging civil money penalties 

imposed under the terms of the 

enforcement notice without interruption 

until the State submits an approvable 

plan. 

(2) Where a State has met the 

conditions under paragraph (e)(1)(i) of 

this section, CMS will notify the State 

that the enforcement actions are being 

lifted. For States that were required to 

suspend procedural disenrollments, 

such notice will include the date on 

which the State may resume such 

disenrollments. For States that were 

subject to civil money penalties, such 

notice will include the date on which 

such civil money penalties stopped 

accruing, the total number of days for 

which civil money penalties accrued 

and the amount(s) of such civil money 

penalties, and the total amount of civil 

money penalties owed. 

(f) Administrative review—(1) Appeal 

to the Departmental Appeals Board. A 

State that is dissatisfied with CMS’s 

determination under paragraph (c) of 

this section that the State must suspend 

procedural disenrollments or pay civil 

money penalties because the State has 

failed to submit or implement an 

approvable corrective action plan may 

appeal, pursuant to 45 CFR part 16, the 

imposition of such suspensions of 

procedural disenrollments or civil 

money penalties to the Departmental 

Appeals Board (the Board) within 30 

days after receipt of a notice described 

in paragraph (c)(2) of this section. The 

appeal request must comply with 45 

CFR 16.7, and the process for counting 

days to submit an appeal will follow the 

provisions under 45 CFR 16.19. The 

appeals process is governed by 45 CFR 

part 16. If the State does not submit an 

appeal request within the 30-day 

timeframe provided for an appeal to the 

Board, then the decision described in 

the notice received by the State under 

paragraph (c)(2) of this section is the 

final decision of the Secretary and is 

final agency action within the meaning 

of 5 U.S.C. 704. 

(2) Reconsiderations by the 

Administrator. (i) If any party to the 

appeal is dissatisfied with the Board’s 

decision under paragraph (f)(1) of this 

section, it may seek the Administrator’s 

reconsideration of that decision within 

15 calendar days of receiving notice of 

the decision pursuant to 45 CFR 16.21. 

(A) The request for reconsideration 

must be filed with the Administrator 

and must include a copy of the Board’s 

decision, a brief statement of why the 

party believes the decision was wrong, 

and a statement of the amount of any 

civil money penalties in dispute. 

(B) The party requesting 

reconsideration must send a copy of the 

request described in paragraph 

(f)(2)(i)(A) of this section to all other 

parties to the appeal and other 

participants in the appeal (as described 

in 45 CFR 16.16) at the same time that 

the request is filed with the 

Administrator. 

(C) Any other party to the appeal, or 

other participant in the appeal, may 

respond to the request for 

reconsideration in writing and file their 


lotter on DSK11XQN23PROD with RULES1
84736 Federal Register / Vol. 88, No. 233 / Wednesday, December 6, 2023 / Rules and Regulations 

response with the Administrator within 

15 calendar days of the date the request 

for reconsideration is filed with the 

Administrator. 

(D) The Administrator will review the 

Board’s decision and any additional 

information submitted by the parties 

and other participants under paragraphs 

(f)(2)(i)(A) or (C) of this section and, 

within 60 calendar days after the Board 

issues notice of its decision under 45 

CFR 16.21, will either affirm the Board’s 

decision or issue a new decision. 

(ii) Within the 60-day period that is 

described in paragraph (f)(2)(i)(D) of this 

section, the Administrator may also 

modify or reverse the Board’s decision 

even if no party to the appeal has 

requested reconsideration of that 

decision. 

(iii) If no request for reconsideration 

is filed under paragraph (f)(2)(i) of this 

section and the Administrator does not 

modify or reverse the Board’s decision 

within the 60-day period described in 

paragraph (f)(2)(ii) of this section, then 

the decision of the Board is the final 

determination of the Secretary and is 

final agency action, as described in 

paragraph (f)(2)(v) of this section, and 

the Administrator will provide notice to 

all parties and other participants of such 

decision as described in paragraph 

(f)(2)(iv) of this section. 

(iv) The Administrator will provide a 

notice to all parties and other 

participants of the final decision 

together with a notice indicating that 

this is the final determination of the 

Secretary and is final agency action, as 

described in paragraph (f)(2)(v) of this 

section. 

(v) The determination of the 

Administrator pursuant to paragraph 

(f)(2)(i)(D) or (f)(2)(ii) of this section is 

the final determination of the Secretary 

and is final agency action within the 

meaning of 5 U.S.C. 704. 

(g) Severability. Any provision of this 

section held to be invalid or 

unenforceable by its terms, or as applied 

to any person or circumstance, or stayed 

pending further State action, shall be 

severable from this section and shall not 

affect the remainder thereof or the 

application of the provision to persons 

not similarly situated or to dissimilar 

circumstances. 

PART 435—ELIGIBILITY IN THE 

STATES, DISTRICT OF COLUMBIA, 

THE NORTHERN MARIANA ISLANDS, 

AND AMERICAN SAMOA 

■ 5. The authority citation for part 435 

continues to read as follows— 

Authority: 42 U.S.C. 1302. 

■ 6. Sections 435.927 and 435.928 are 

added to subpart J to read as follows: 

§ 435.927 Requirements for States to 

submit certain data on redeterminations. 

(a) Basis. This section implements 

section 1902(tt)(1) of the Social Security 

Act. 

(b) Definitions. As used in this 

section— 

(1) Timely means the following: 

(i) Data submitted according to an 

existing process governed by CMS 

regulation or guidance (other than data 

submitted through the Transformed 

Medicaid Statistical Information System 

(T–MSIS)) are timely if they are reported 

by the deadline specified in the 

applicable CMS regulation or guidance. 

(ii) Data submitted under the existing 

process for the T–MSIS are timely if 

they are submitted on a monthly basis, 

before the last day of the subsequent 

month. 

(iii) Data that States submit according 

to an alternative process approved by 

CMS or an alternative timeline 

approved by CMS under the 

circumstances specified in paragraph 

(b)(4) of this section are timely if they 

are submitted on the deadline CMS 

specifies when it approves the 

alternative process or timeline. 

(2) Complete means that all required 

elements are reported. 

(3) Sufficient quality means the 

following: 

(i) For data submitted according to an 

existing process governed by CMS 

regulation or guidance, the data adhere 

to specifications outlined in the 

applicable CMS regulation or guidance. 

(ii) For data submitted according to an 

alternative process approved by CMS 

under the circumstances specified in 

paragraph (b)(4) of this section, the data 

adheres to the specifications approved 

by CMS when it approves the 

alternative process. 

(4) Good faith effort means that— 

(i) The State is experiencing 

significant, unforeseeable, or 

unavoidable challenges in complying 

with the reporting requirements of 

paragraph (c) of this section, or is 

experiencing significant foreseeable 

challenges in complying and is working 

to remediate these challenges but needs 

additional time to address them; 

(ii) The State requested, and CMS 

approved an alternative process for 

submitting the data or an alternative 

timeline; and 

(iii) The approved alternative process 

for submitting the data or timeline is 

sufficient to ensure CMS can obtain and 

use the data to meet CMS’ obligations to 

report the data publicly per section 

1902(tt)(1) of the Act. 

(c) Reporting requirement. For data 

representing activities conducted by a 

State during the time period beginning 

April 1, 2023, and ending June 30, 2024, 

each State must submit to CMS the data 

described in paragraph (d) of this 

section, and those data must be timely, 

complete, and of sufficient quality (as 

those terms are defined in paragraph (b) 

of this section). To meet this 

requirement, a State must: 

(1) Submit data via existing CMSapproved processes; or 

(2) Submit data through alternative 

processes approved by CMS, under the 

circumstances specified in paragraph 

(b)(4) of this section. 

(d) Required data elements. States 

must submit the following data to CMS 

in accordance with paragraph (c) of this 

section: 

(1) Total number of Medicaid and 

Children’s Health Insurance Program 

(CHIP) beneficiaries for whom a renewal 

was initiated. 

(2) Total number of Medicaid and 

CHIP beneficiaries whose Medicaid or 

CHIP coverage is renewed. 

(3) Of the Medicaid and CHIP 

beneficiaries whose Medicaid or CHIP 

coverage is renewed, the total number 

whose coverage is renewed on an ex 

parte basis. 

(4) Total number of individuals whose 

coverage for Medicaid or CHIP was 

terminated. 

(5) Total number of individuals whose 

coverage for Medicaid or CHIP was 

terminated for procedural reasons. 

(6) Total number of beneficiaries who 

were enrolled in a separate CHIP. 

(7) For each State call center, total call 

center volume. 

(8) For each State call center, average 

wait times. 

(9) For each State call center, average 

abandonment rate. 

(10) For States with State-based 

Exchanges (SBEs) using a NonIntegrated Eligibility System and not 

using the Federal Exchange eligibility 

and enrollment platform: 

(i) Total number of individuals whose 

accounts are received by the SBE or 

Basic Health Program (BHP) due to a 

Medicaid/CHIP redetermination. 

(ii) Total number of individuals who 

apply for coverage due to a Medicaid/ 

CHIP redetermination who are 

determined eligible for a QHP or a BHP. 

(iii) Total number of individuals who 

apply for coverage due to a Medicaid/ 

CHIP redetermination who are 

determined eligible for a QHP or a BHP, 

and who make a QHP plan selection or 

are enrolled in a BHP. 

(11) For States with SBEs with an 

Integrated Eligibility System and not 

using the Federal Exchange eligibility 

and enrollment platform: 

(i) Total number of individuals who 

apply for coverage due to a Medicaid/ 


lotter on DSK11XQN23PROD with RULES1
Federal Register / Vol. 88, No. 233 / Wednesday, December 6, 2023 / Rules and Regulations 84737 

CHIP redetermination who are 

determined eligible for a QHP or a BHP. 

(ii) Total number of individuals who 

apply for coverage due to a Medicaid/ 

CHIP redetermination who are 

determined eligible for a QHP or BHP, 

and who make a QHP plan selection or 

are enrolled in a BHP. 

(e) Severability. Any provision of this 

section held to be invalid or 

unenforceable by its terms, or as applied 

to any person or circumstance, or stayed 

pending further State action, shall be 

severable from this section and shall not 

affect the remainder thereof or the 

application of the provision to persons 

not similarly situated or to dissimilar 

circumstances. 

§ 435.928 Reduction in FMAP for failure to 

submit certain data. 

(a) Basis. This section implements 

section 1902(tt)(2)(A) of the Social 

Security Act. 

(b) Application of the FMAP 

reduction. (1) FMAP means the Statespecific Federal medical assistance 

percentage as defined in the first 

sentence of section 1905(b) of the Act. 

(2) If CMS finds that, for a fiscal 

quarter in the period beginning on July 

1, 2023, and ending on June 30, 2024, 

the State was noncompliant with the 

requirements of § 435.927, CMS will 

reduce the State’s Federal medical 

assistance percentage (FMAP) for that 

fiscal quarter as described in paragraph 

(b)(4) of this section. 

(3) A State is noncompliant in a fiscal 

quarter if it has failed to comply with 

the reporting requirements described in 

§ 435.927 for one or more months of the 

quarter. 

(4) The FMAP reduction under 

paragraph (b)(2) of this section will 

equal the product of 0.25 percentage 

points and the number of the fiscal 

quarters during the period from July 1, 

2023, through June 30, 2024, in which 

the State is noncompliant with the 

reporting requirements described in 

§ 435.927. When States are 

noncompliant in multiple quarters 

during that period, the FMAP reduction 

will increase by 0.25 percentage points 

for each successive quarter of 

noncompliance, even if nonconsecutive, 

but in no case will the reduction for any 

single quarter exceed 1 percentage 

point. 

(c) Severability. Any provision of this 

section held to be invalid or 

unenforceable by its terms, or as applied 

to any person or circumstance, or stayed 

pending further State action, shall be 

severable from this section and shall not 

affect the remainder thereof or the 

application of the provision to persons 

not similarly situated or to dissimilar 

circumstances. 

Title 45 

PART 16—PROCEDURES OF THE 

DEPARTMENTAL GRANT APPEALS 

BOARD 

■ 7. The authority for part 16 continues 

to read as follows: 

Authority: 5 U.S.C. 301 and secs. 1, 5, 6, 

and 7 of Reorganization Plan No. 1 of 1953, 

18 FR 2053, 67 Stat. 631 and authorities cited 

in the Appendix. 

■ 8. Section 16.22 is amended by 

revising paragraphs (b)(3) and (4) and 

adding paragraph (b)(5) to read as 

follows: 

§ 16.22 The effect of an appeal. 

* * * * * 

(b) * * * 

(3) In programs listed in appendix A, 

B.(a)(1), to this part implement a 

decision to disallow Federal financial 

participation claimed in expenditures 

reported on a statement of expenditures, 

by recovering, withholding or offsetting 

payments, if the decision is issued 

before the reported expenditures are 

included in the calculation of a 

subsequent grant; 

(4) Take other action to recover, 

withhold, or offset funds if specifically 

authorized by statute or regulation; or 

(5) Take action to require a State to 

suspend procedural disenrollments, as 

defined at 42 CFR 430.5, or continue the 

accrual of the civil money penalties a 

State owes under 42 CFR 430.49(c). 

■ 9. Appendix A of part 16 is amended 

in section B by adding paragraph (a)(7) 

to read as follows: 

Appendix A to Part 16—What Disputes 

the Board Reviews 

* * * * * 

B. * * * 

(a) * * * 

(7) Decisions relating to suspensions of 

procedural disenrollments and civil money 

penalties under 42 CFR 430.49(c). 

* * * * * 

Xavier Becerra, 

Secretary, Department of Health and Human 

Services. 

[FR Doc. 2023–26640 Filed 12–4–23; 4:15 pm] 

BILLING CODE 4120–01–P 

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Part 25 

[IB Docket Nos. 22–411; 22–271; FCC 23– 

73; FR ID 188451] 

Expediting Initial Processing of 

Satellite and Earth Station Applications 

AGENCY: Federal Communications 

Commission. 

ACTION: Final rule. 

SUMMARY: In this document, the Federal 

Communications Commission 

(Commission) adopts changes to its 

rules aimed at expediting the initial 

license application processing for 

satellite operators. The Commission 

establishes timeframes for placing 

satellite and earth station applications 

on public notice, eliminates a 

procedural rule that prevents 

consideration of requests for waiver of 

the International Table of Frequency 

Allocations, and removes the 

prohibition on licensed-but-unbuilt 

systems for non-geostationary orbit 

(NGSO) operators. Additionally, the 

Commission creates a new, streamlined 

processing framework for earth station 

operators to add satellite points of 

communication under certain 

circumstances. Finally, the Commission 

lays the groundwork for a broader 

Transparency Initiative led by the Space 

Bureau to provide clarity and access to 

applicants when interfacing with the 

Commission’s license application 

processes and filing system. 

DATES: Effective January 5, 2024. 

FOR FURTHER INFORMATION CONTACT: Julia 

Malette, Attorney Advisor, Satellite 

Programs and Policy Division, Space 

Bureau, at 202–418–2453 or 

julia.malette@fcc.gov. 

SUPPLEMENTARY INFORMATION: This is a 

summary of the Commission’s Report 

and Order, FCC 23–73, adopted 

September 21, 2023, and released 

September 22, 2023. The document is 

available for download at https://

docs.fcc.gov/public/attachments/FCC23-73A1.pdf. To request materials in 

accessible formats for people with 

disabilities, (e.g., Braille, large print, 

electronic files, audio format, etc.) send 

an email to FCC504@fcc.gov or call the 

Consumer & Governmental Affairs 

Bureau at 202–418–0530 (voice), or 

202–418–0432 (TTY). A proposed rule 

relating to further expediting satellite 

and earth station application processing 

is published elsewhere in this issue of 

the Federal Register. 


lotter on DSK11XQN23PROD with RULES1